Open threads get unpinned from the the first position when they reach 100 comments (or thereabouts). Also, I have set wordpress to reset at 50 comments so a thread doesn’t get too unwieldy.

The stock market has been fun today. I took some time to buy a few more winners and to shed some more of a loser. September is often the cruelest month and I don’t just mean in 2008. Historically, September usually stinks. Perhaps it is because all the fat cats come back in from the Hamptons and decide to clean house. Or maybe the end of the govt’s fiscal year is in sight. At any rate, not many of us have found our fortunes in September.

Does anyone have anything wise and profound to say about the market(s)?

121 Thoughts to “New Open Thread for the Week Monday, Sept. 13”

  1. Cargo, gold is not a good buy now. It is a good sell and a good keep. It costs too much!!!!

    Wait, weren’t you the guy that said silver sounds better to clink when you count it?

    snicker.

  2. Cato the Elder

    You may want to consider taking some profits into S&P 1130ish. That’s serious resistance as well as a level we struggled with all summer and while I think we may (MAY) go through it this time (my target is 1158) personally I’ve been de-risking and/or building short positions. Anytime you see treasuries, metals and equities go up in tandem it’s a red flag – something has to correct, and I think it’s going to be equities b/c we’re coming into the top of the range. You have two potential landmines this week as you get Empire manufacturing numbers on Wednesday and Philly Fed on Thursday, and both will probably be god-awful.

    Some of the leadership has not traded well on an intraday basis. Most of the action has been in the opening gap and we see some of the leaders go to intraday new 52 week highs then fade the open and close off their highs. You should also pay attention to this: http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm (thanks Uncle Sam!) as it allows you to see where and how the institutional money is positioning for the coming weeks (long story short the institutional guys are going to net cash on the week of the 20th and bearish after that).

    On the positive side, AAPL just cleared a major swing point today on OK volume so this supports a move slightly over 1130 if it continues to act well. (AAPL is 30% of the index so you want to watch this closely – if they break AAPL down it means that they’re going to roll the market over)

    I wouldn’t be chasing performance here. All your risk is to the downside. If you see a move through 1131 on convincing volume you may want to build starter positions if you’re in the bull camp but do yourself a favor and wait for that resistance to be broken first. There will be plenty more to be made after the breakout (if it happens).

    Personally, I’m in the bear camp. I get concerned when I see parabolic moves in stocks on really no new data and extra concerned when I see volatility come out of a market as fast as we’ve seen it get sucked out of this one over the past week. Charts like CRM and AKAM look like they could roll over here and that’s the kind of thing you want to keep a close eye on. Remember, during a selloff it’s the most loved stuff that gets hit the hardest and it’s also going to be where you make the most short money. Other good shorts to monitor would be something like the IWM (R2K index fund) or the triple levered cousin (TNA) and the way to do it is to either buy puts or sell them to others because you’ll capture the move plus the fear premimum.

  3. Cato the Elder

    And since it was mentioned, gold might be in for a short term correction. The daily charts look like they could roll over while the weekly still looks like the stairway to heaven. In other words any pullback in gold should be used to add to an existing position or start a new one.

  4. e

    In 1923, at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper. Most Germans were taken by surprise by the financial tornado.
    repace german with american, mark with dollar, 1923 with ???

  5. Thanks Cato. I am going to ask you if you can talk, at least to me, at a lower level. I think you said some things I really need to hear and I am not sure I understand everything you said.

    words like leadership, parabolic moves, etc are just things I don’t understand.

  6. Cato, more questions….do you mean gold bullion or any of the other ways one can own gold, silver, precious metals, like stock in mines, etfs, etc.

  7. I just finished watching the tail end of the Manassas City Coucil citizen time. I am speechless. totally speechless.

    What a relief to hear from the people who just want to go fishing.

    Righteous indignation certainly reared its ugly head tonight. I am just glad I live in the county after getting a load of the good religious zealots of Manassas.

    Maybe some of those people whining about adult boutiques and abortion ought to just go fishing. Fishing cures a lot of things, as is proven by one of my favorite movies/books: A River Runs Through it.

  8. punchak

    Carl Paladina is in a 3-way race for the governorship in New York.
    He has sent out e-mails that are not to be believed. If interested, go to
    WNYMedia.net

    I heard about it on MSNBC tonight.

  9. Cato the Elder

    Leadership = stocks like CRM, AAPL, GS, VMW, NFLX, CMI, JOYG, WHR, and many others too long to mention in comment. You’re looking for stocks that rise 3% when the broad market is only up .85%. Conversely, they also lead the charge to the downside.

    Parabolic move = I use the term (derivative of parabola) to describe a violent move in either direction (up or down). Typically such things do not happen in the natural order, and when they do they are unsustainable. Ergo, when I see markets start to make sustained trade in excess of 2 std dev from their mean alarms bells start going off – some reversion to the mean is necessary. Consider that the S&P has surged in excess of 8% off the Aug. lows. This means you’re entering risk territory and that adding to long positions is a low probability play.

    As to gold I don’t like it at all. I realize that it’s been very profitable for a great many people, but it’s what’s known in the business as a “crowded trade” meaning that everyone and their cat is long of gold. What would happen if tomorrow everyone woke up and deduced that gold was not something that you could eat or drink, and that it has no industrial use? When the selloff comes, it will be so fast and violent that small investors will be unable to get out. Trust me that’s not a trade you want to be on the wrong side of. If you must, buy hard gold. You can go with the junior miners like IAG, BVO, EG, etc. but if you want to play that theme look at companies that actually mine other stuff like rare earth elements. There are billion screaming people in China whose incomes are rapidly improving and the first thing they’re going to want to do is eat better so rare earth fertilizers (like potash) that facilitate this is the first place you should look.

  10. @Moon-howler
    Not me. Just that its cheaper. Then again, cheaper compared to ……..

    Gold is only too expensive if you do not expect it to go higher. The same could be said of any investment.

    I have no idea what any of the investment possibilities are going to do. Buy lottery tickets.

    At least you can start a fire with them…

    Cato has very good points and mirrors what may “gold bugs” are saying, especially about the mining companies. Many of them produce silver, also.

  11. Morris Davis

    My recommendation would be REITs that own apartments. I don’t see home sales taking off and people have to live somewhere. Only 1 major REIT went bust and none got a bailout … compare that to banks, financial firms, and autos. They will never go thru the roof like a MSFT or GOOG, but they are unlikely to fall off a cliff like Lehman or Enron, and you can probably get about an 8% dividend (compare that to a money market account or CD).

  12. punchak

    J. Gordon Liddy pitches gold on Fox. For Rosland Capital.

    Buy from someone you can trust!!!!!!!!!!!!!!!!

  13. Cato, where might I find a leadership list?

  14. Emma and Chris, I hope you all saw the 19th Wife on lifetime cable. It was Big Love in theme. Excellent. If you didnt see it, it repeats Sat. Sept 18th at 9 pm and Sun. 19 at 9 pm.

  15. Headline from today’s Wall Street Journal:

    American International Group Inc. and its government overseers are in
    talks to speed up an exit plan designed to repay U.S. taxpayers in
    full while enabling the giant insurer to regain independence,
    according to people familiar with the matter.

    So, it looks like another profit for the U.S. taxpayer. AIG was
    basically the one of the financial companies in the worst shape. That
    leaves only Freddie Mac and Fannie Mae I believe.

  16. I’m just afraid that it’s smoke and mirrors like the Government Motors pay back. They blatantly lied about paying back their loan. They used other government loaned money to do it and still only paid back less than borrowed.

  17. e

    another win for the american taxpayer? talk about robbing peter to pay paul. the american taxpayer is facing unfunded government liabilities of 30 to 70 trillion dollars. and it’s going to get worse with the expiration of the bush tax cuts come jan 1. look for the gov’mt to start seizing ira’s and retirement accounts. as healthcare is to be nationalized into single payer, so will retirement and private equity

  18. Cato the Elder

    @Moon-howler

    re: leadership – the IBD 100 gets a lot of attention as the definitive grouping of companies who are sound from both a technical and fundamental perspective http://www.investors.com/StockResearch/ScreenCenter/Default.aspx?start=ibd (requires a subscription, but well worth it if you’re active in the markets)

    Also, someone mentioned REITs and I couldn’t agree more. A lot of them pay decent dividends too so you’re getting paid to wait. I’m not in there because I like to play momentum but if my style were more conservative I’d be all over them.

  19. Cargo, the stock still hasn’t gone public yet. That will be part of the payback.
    Where is this coming from, that they lied?

    Is that like Virginia blatantly lying about having balanced their budget when they haven’t paid their VRS oblications and owe the pension fund several billion bux?

    Virginia borrowed from the pension fund to balance their budget.

  20. e, the sky is falling? Now seriously…do you believe that is really going to happen?

    Besides, are you in the upper 2% tax bracket? I sure am not nor are most people I know.

  21. @Moon-howler
    Actually, yes. One cannot balance a book with borrowed money. GM went on the air stating that the loans had been paid back. It was not true. They stated that they had paid 8 billion back and that was what was owed, when actually the loan was in the tens of billions.

    And they borrowed THAT eight billion.

  22. Thanks, CTE. My stocks with only a couple exceptions are OPS (old people stocks)

    I think it might be time to stick a REIT back in my portfolio.

  23. e

    mh, the bush tax cuts were for everyone, to my understanding. the lowest tax bracket of 10%, of which i am proud to be a member of because work is a four letter word :), will go up to 15% come jan 1. i think the democrat party mantra of the last 8 years “bush cuts for the rich” has hidden that fact from a lot of people. jan 1 a lot of folks are going to be in for a rude awakening

  24. Lafayette

    City of Manasss is holding a planned Town Hall meeting at Baldwin Elementary(Main St) tonight at 7PM.

  25. Lafayette

    oops Main St.
    please, fix moon.

  26. done, Laf.

    What is the purpose of this meeting? More whining by the repressed? More thundering by those who want to legislate morality?

    I wonder how many of those people up trumpeting against the women’s clinic fully support birth control to prevent unintended pregnancy?

  27. e,

    I understand the Bush tax cuts will be extended to everyone in the lower 98%.

    I don’t like mantras from either side. They are just that…mantras. Tax cuts are tricky things also. Sometimes they are on earned income, sometimes they are bottom line, sometimes they appear in your tax bracket which for many people is continually changing….

  28. Buy nothing… if you need it…

    Grow it
    Build it
    Craft it

    and if you can’t create it for yourself, trade what you can do for something you can’t.

    Humans have so much potential, but money de-motivates us from living up to it.

  29. Cato the Elder

    @Moon-howler

    Take a look at IYR – it’s a basket of the best REITs and you’re not exposed to single company risk.

  30. Thanks Cato. Now what is the difference in IYR and ICF? Is ICF a REIT also? I used to have that but unloaded it a while back.

    The market has struggled back so far. I always think that is just a sign of how tough it really is.

  31. Censored bybvbl

    Another meeting in Manassas!? What’s the topic de jour? Has the last week given some Council members time to visit the local shops to see what’s available to relieve them of their bunched up panties? Or is a witch hunt to pursue with the other two shops the fuel for the Puritans’ torches? I bet there might be some interesting images on a couple shops’ video cameras.

  32. Censored, maybe drugs, sex and rock and roll? The Manassas version would be Abortion, sex toys and fishing.

    What I find rather amazing is that the clinic has been over there for 21 years and Fashion Fantasy has been there at least 15. I told told by a long time Manassas lady more than 20 years. So why the great awakening? The entertainment factor is getting pretty good though. What shall we do today? Go watch the torches and pitchfork side show put on by the City of Manassas. Shoot, get Fernandez back in there and it will become the original three ring circus.

    And yet some of these holier than thou folks would probably go vote for that tea party candidate for governor in NY. The same one that sends emails to his buddies of a woman performing a sex act on a horse and dancing witch doctors labeled ‘Obama’s inauguration..’

    Actually, hearing about a guy wanting to go fishing seemed so normal after listening to people cry or almost cry over a shop that will mainly sell naughty lingerie and vibrators.

  33. Cato the Elder

    @Moon-howler

    They’re both ETFs run by iShares. ICF has lower management fees but IYR is bigger by assets. Also, one of the things that you want to look at before you buy is volume. ICF is very thinly traded, IYR has good volume and liquidity.

    You really can’t get hurt in either one, there’s always a bid under the REITs as the shorts are piled in.

  34. Inez Sainz, the reporter who apparently was sexually harassed by the NY Jets is the biggest phony baloney I have ever seen.

    She needed to have known my grandmother who would have explained it all to her.

  35. Thanks Cato. I just plugged them in and I see what you are talking about with volume.

  36. Censored bybvbl

    These “family values” types of busybodies need to spend more time with their actual families and less time protesting what types of panties people wear and how they spend time in their bedrooms. I never remember my father or mother attending long public meetings to protest what other people do in the privacy of their bedrooms or telling people how to manage their sex lives. But they did take time to take us swimming, hiking, fishing (for real fish). They read to us, played basketball and tennis with us, and tried to teach us to cook. To think about their or other adults’ sex lives when we were little would have been a major “ick” factor.

  37. My parents didn’t get involved in that stuff either, Censored. No banned book lists etc.

    I do remember my mother taking a book that was optional reading for an English class out of the house in a paper bag and saying she didn’t want the garbage man to see the trash I was reading (Erskine Caldwell I believe). The big difference is Mother went after MY taste and didn’t try to burn down the book store where I bought it or take on the school that put the book on an optional list. I think Mother had also gotten off my bookshelf for something to read and got grossed out. NO! Wait. It was Tropic of Capricorn–Henry Miller. It had been on the banned book list so she was familiar with it already…saw it on my shelf in the living room and …took it to the trash can.

  38. I might add, she was making the point that the book was universally regarded as porno–so much so that the garbage men of Charlottesville would even recognize it and judge our family. But she didn’t go after anyone but me. I was her business. She grew up in a college town and certainly wasn’t unfamiliar with more avant garde thinking. She would have never protested. I was her business. Not the rest of the world. Her busy-body-ness stopped at torturing me…she left the rest of the town alone.

  39. The meeting at Baldwin Elementary School is simply the regularly scheduled “Communicating with Our Residents” Town Hall Meetings that are scheduled throughout the city, throughout the year.

    http://www.manassascity.org/DocumentView.aspx?DID=320

    It’s a great chance to meet your community policing team and get face time with people representing all the different departments of the city, from trash and recycling to fire and rescue. They have booths and information giveaways. Then Mayor and Council run it like a council meeting with citizen time. Everyone is welcome, but especially residents of the neighborhoods listed on the document I linked.

  40. Lafayette

    Don’t forget the PWCBoS is back in session today at 2pm. Annual Citizens’ Survey will be presented today. Agenda is below.

    http://www.pwcgov.org/documents/bocs/agendas/currentagenda.pdf

  41. Andy H

    “Righteous indignation certainly reared its ugly head tonight. I am just glad I live in the county after getting a load of the good religious zealots of Manassas. ”

    MH: I’m trying to be even-toned as I don’t appreciate the abuse so I’ll leave it at this: I looked at the sign up sheets for last Tuesday’s meeting and about 40% of those who spoke lived in the county. Last night I’d guess that the ratio was about the same….

  42. Big Dog

    The Jets may have harassed a reporter, but they certainly didn’t
    harass the Raven defense last night. They broke records for team
    offensive futility that went back over two decades.
    The big mouth louts in puke green got what they deserved –
    on the football field.

  43. Then I retract that they live in the city. @ Andy. It only makes sense that they would cross boundaries to protest. By the way, I thought you maintained a wonderful disposition during all of that.

    My objection is with those I heard, not the City of Manassas. I should have made that clear. I honestly think you all, to date, have done the right thing.

    Andy, I think I have been vocal enough on this subject that you should know that I wasn’t abusing you. Both of my kids work in the city and 1 lives in the city. I come over your way to drop cash.

    To further clarify, my issue is with the protestors, not you guys. I am sorry county guys are over there taking up your time also. It was unfair of me to say they were all city folks. They have a right to protest and I have a right to think they are being absurd and sanctimonious.

  44. Censored bybvbl

    M-h, most on the Council want to do the right thing, but there are a couple who prefer the far-right thing.

    My mother was an English/French major. I remember seeing both Caldwell’s and Miller’s books on our shelf. I always thought of Caldwell as a popular fiction writer and was surprised to find him on the required reading list for a Southern Lit. class I took.

  45. Caldwell is now listed with famous southern writers like Faulkner, Wolf, Lee, Williams. I was surprised also.

    I do think most want to do the right thing and play by the rules. There are some who play to their base who want to exercise their authority. I will judge the coucil by the majority.

    Censored, did you read them? I liked DH Lawrence and Caldwell. Miller was too ick fo rme. I don’t think I had totally read it when it met its demise in the Charlottesville landfill.

  46. There is a great photo-essay on the atomic bomb in the NYTimes.
    http://www.nytimes.com/interactive/2010/09/14/science/20100914_atom.html?nl=multimedia&emc=focusema1

    On a good note, retail sales were much higher in August. Cheer. (and I helped!)

  47. Censored bybvbl

    M-h, I think what was on our syllabus was his (Caldwell’s) collaboration with Bourke-White…not Tobacco Road or God’s Little Acre. I love Southern Lit – think it’s the best the USA has to offer. I couldn’t name just a couple writers, but Faulkner is my favorite. Like McCullers, Barth, Percy, Hurston, Welty, Harper Lee, O’Connor. The list goes on. The South is probably the only region with enough angst to produce that many great writers.

  48. Big Dog

    “A leaf, a rock, an unfound door”

    You skipped over Mr. Angst of Southern writers – and talk about
    mother issues, trains and tombstones. Head to the hills!

  49. I mentioned Wolfe but I misspelled his name. @ big dog

    I think Faulkner is a difficult read. I saw him a few times when he lived in Charlottesville. i think he had a daughter who permanently stayed there. @censored

    And speaking of southern writers…we have omitted to name Earl Hamner Jr. I worked with his brother Jim Hamner when I was a young woman. He is now dead. Jim was the one who kept the Walton Museum and foundation alive. He was the model for Jim Bob in the Waltons, where Earl was John Boy.

    Hamner was more prolific as a tv screen play writer than as a novelist, but I dearly loved Spencer’s Mountain.

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