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Existing Home Sales Plunge, Unemployment to do the reverse

Existing Home Sales which are more important than the new home sales data plunged over 27% year over year, the amount of sales was the lowest since 1995. At the current pace it will take over 1 year (yes 12+ months) to sell the existing houses out there.

People have begun losing their jobs once again after a few months of lowering unemployment claims. How do I back this up? No data other than I now have more than one close acquaintance that within the next 2-3 weeks will receive a pink slip. They survived during the worst of it all and now employers are deciding its time to let go. Thats amazing! Keep your profits because you wont be making as much money in the future with 15% of the american workforce unable to afford staples such as bread without a food stamp.

On the currency front according to ZeroHedge

And once again, all of Europe is dumping its deposits in Switzerland, running away from domestic banking centers, and making the lives of Hungarian CHF-denominated debtors a living hell. The EURCHF just hit an all time low of 1.3066. The Bank intervention sonar just went apeshit as both the BoJ and the SNB are fully expected to intervene at any moment.

Technically Speaking? See for yourself how the market has acted recently especially since I officially returned from break August 6th.

K- August 6th, 2010
vacation just ended today so it will take me at least a week to slowly get the groove back. be patient this time...

Euro/Usd and SPX have been in a water slide since.  Its hard getting from Information overload mode to 2 month no internet and back to information overload so I tire out by all the information I once processed in a usual day so the recovery process puts me on tract to return trading right after labor day and the Special chart that hasn't been posted here in a bit as well. (Click to Enlarge)

Happy Trading and make money trading not listening to baldies at CNBC unless he entertains you and the advice isnt followed.

-K

The Perfectly Timed Vacation

It's been six weeks and the stockless and unwired vacation has wound down. To my surprise I see that BP bottomed right when I covered my July puts at a profit and since its nearly 39% up. Euro went from 1.22's to 1.33's and so on. Its time for me to find the reigns and take control of the market once more.

It will be a week or two until I get my trading groove on but for now i've updated the Current Pick's page on top.
here are the main indices.

Market Indices

Hope its been a profitable 100 point market move for my fellow readers and here's to more fun swings to come.

-K

First Day of Summer

Its June 21st and officially first day of summer. With that being said a summer vacation is in the works which might result in some inactivity on here.
But until then I will not stop improving and updating the blog. Last week I managed to get the blog running from 7 second load page to less than 2 which is 3x faster.

Next up was the much neglected Current Picks page that wasn't updated since May 15th. That is now checked off the list and also an improvement in the look of the current picks page was done. Here is a before and after shot.

Next up on that page is to have a visual chart for at least the main indices but don't expect it anytime soon.

Getting away from general information and into market talk. It seems like 6-10-2010 was a turning date for the majority of the symbols that my system tracks. The S&P is up 31 points (nearly 3%) since then. One thing i noticed is that 1139 is strong resistance if it the market gets that high.

Seeing this i decided to have some fun by plugging in BP stock into the system and i'll let the chart speak for itself. Keep in mind BP rig exploded April 20th.

The Futures are up 13 points (1%). Only scheduled news is for Bennies counterpart Trichet to speak at 12:30pm.  Unscheduled news? well the US navy moving around in the Red Sea and the Israeli crafting a new "do not bring into Gaza" list.

Update: Oh and what's this? Far offshore, crews drill into Gulf to stop oil (AP) Relief well? Ay Dios Mio!! The only little people left after this will be BP shareholders and pension funds. They dont know how much oil is underneath there... oh wait one relief well might not be enough because the aim has to be precise so lets drill about 50 and deplete the oil ASAP and when the bottom of the gulf becomes an empty cavity without the oil and collapses on itself it'll look like a humongous version of  the Guatemalan Sinkhole and lets not mention the Mega Earthquake a crashing of the seafloor would create but wait lets add some tsunami for a topping . I realize i'm being a bit unrealistic as this takes time but lets put it this way,I might still be alive when it happens and it will not be pretty.

Make Money!!

-K

Capital Gains Tax Rates to increase in 2011

President Obama has publicly said that he will let the Bush-era capital gains tax cuts expire on schedule this year, so it’s important to know how they will affect your investments.
If you're in the 10-15% tax bracket long term cap gains will go from 0% to 10% so if you have investments that you've held long term you might think of selling this year to avoid paying 10% to IRS  unless you are making a loss in which case you can hold and pray forever. For more detailed brackets visit Bargaineering

I always felt that the speed at which the TARP money was getting repaid was extreme for such a crisis. Major players paid big bucks back in order to possibly restore confidence in their institutions and the economy (of course so they could use more money to pay their CEO's bonuses as well which was forbidden under TARP).  The latest headline didn't shock me one bit.

After a string of profitable paybacks from Goldman Sachs, JPMorgan and 59 others, the list of deadbeats is growing. In May, 91 banks missed their dividend payments to taxpayers. Two big banks already look like serious zombies. Pacific Capital Bancorp , with $7.4 billion of assets, and Anchor Bancorp Wisconsin with $4.5 billion, have each missed five dividend payments and appear incapable of surviving without taxpayer cash.

This is so awesome and so unworthy of mentioning (since we know news always gets factored in before its published) but since my Celtics lost I had to create a new blog post.

Make money tomorrow and be careful if you're messing with options as its options ex day.

-K

BP now stands for Bad Publicity

After creating one of the biggest disasters in US history with the Gulf Oil Spill, British Petroleum (BP) has tried to buy ads on Google to get their message through, however, they have not just stopped at buying ads for Google search and have been promoting their message on YouTube too.

BP plc (ADR) has concluded that its “top-kill” attempt to seal its broken well in the Gulf of Mexico may have failed due to a malfunctioning disk inside the well about 1,000 feet below the ocean floor. If the casing is compromised the well is that much more difficult to shut down, including the risk that the relief wells may not be enough. If the relief wells do not result in stopping the flow, the next and drastic step is to implode the well on top of itself, which carries other risks as well. The real doomsday scenario here… is if that casing gives up, and it does come through the other strings of pipe. Remember, it is concentric pipe that holds this well together. If it comes into the formation, basically, you‘ve got uncontrolled [oil] flow to the sea floor. And that is the doomsday scenario. -Naked Capitalism

The U.S. Coast Guard gave BP Plc 48 hours to find more capacity to contain its leaking oil well in the Gulf of Mexico after scientists and researchers doubled their estimates of the spill’s size.Based on government estimates, the drillship isn’t capturing as much of the spill as BP predicted earlier this month. In a June 4 interview with CBS, Suttles said the system would be capable of capturing as much as 90 percent of the flow.

If BP does not comply with this order, and cannot give a satisfactory reason why, this will put them further on the back foot in their meeting with Obama next week. Readers are correctly cynical as to whether the Administration will live up to its tough words, but the groundwork is being laid, which would make failure to follow through even harder to defend.

Separately, BP said its board will meet June 14 to discuss whether to cut or defer its second-quarter dividend payment following the spill. This is causing BP's Major British Shareholders to Ditch The Company While American Ones Are Staying. Major UK institutions including Legal & General, M&G, Scottish Widows, Threadneedle and Axa have all trimmed their holdings since the Deepwater Horizon rig sank. US pension funds – including Calpers, the Teacher Retirement System of Texas and Ohio Public Employees Retirement System – have held their stakes in the company despite the dramatic fall in the share price.

If you think BP is a good buy right now check out this article: The Ultimate Contrarian Bet: BP

Lets see what today has in store for BP and the rest of the market.

Happy Trading

Update 1pm : - Senate Majority Leader Harry Reid (D, Nev.) and members of the Democratic caucus on Monday asked BP Plc (BP) to set aside $20 billion in a special account to be used to pay for economic damages and clean-up costs of an ongoing oil spill in the Gulf Coast.

Update 3:30pm: To demonstrate that it’s responsibly taking care of the oil spill and listening to public complaints, BP has touted the fact that it has set up call centers to handle the response. However, one of the operators at the BP Call Center in West Houston has revealed that she and the other 100 employees are just PR props; BP isn’t actually doing anything with the thousands of calls it receives: "“We’re a diversion to stop them from really getting to the corporate office, to the big people,” said Janice. … Because the operators believe the calls never get past them, some don’t even bother taking notes."

World Cup Friday

If you notice lower volume during the next 30 days you can bet that the World Cup is affecting traders (or maybe just me) with matches at 7AM 9:30AM and 2PM every day. I guess this would mean that soccer fans would come back for the last 30 minutes of trading during the "Adult Swim" hour.

The Data is out and during Q1 household debt contracted 2.2% annually while State and local government debt expanded at 4.25% annually. The financial sector "shed" ~$1.3 trillion in debt (on an annualized basis) in Q1. Is anyone surprised the federal government added almost that same amount? -EconomPic

From 8:30 to 10 am some exciting news come out such as the retail sales data and consumer sentiment. You can check up on them at the Economic Calendar.
Retail Sales Fall, But Not As Bad As Reported Demand plunged at building-material stores, reflecting the end of a government appliance rebate, and sales fell at auto dealers, in contrast to industry figures which showed a gain.  Subtracting those outliers we still have a decline, which shows weakness. Just not as weak as early reports would indicate.

The BP Oil Disaster has become large enough at the moment to cover Albania which now makes Albania the New Frontier for Oil Investors.

Keep in touch using the comment box and even make your pick for the World Cup Champion to be crowned July 11th.
I hope you like the new speed of the website thanks to our seamless move to a new host.

Make some money and think before you hold into the weekend.

-K

Quick Update

I hope you all have been enjoying the profits these past few weeks.

To the followers of InvestingFreak's Current Picks I thank you for your support and I hope the $SPX April 27th Sell signal (along with the other symbols) made you some good money especially if you traded SPY puts. As Shown Below the market has corrected over 10% since then and there still no buy signal.

We now have a 
Button on the right hand side.

To those that have already donated we would like to Thank You! for helping us pay the hosting bills. We hope you continue to enjoy the content on this site.

Lastly I would like to inform you that there won't be any updates from May 22 to June 1st because even Freaks need to take breaks.

Make some money next week and donate 10% to us.

-K

Special: Best Lesson Ever On How To Find Shares To Borrow of Stocks at Different Brokers

Let me just warn you that short selling is even more dangerous than buying (aka going long) stocks.

Why?

If you buy a 1000 shares of MCGI at 2.3, you will pay $2300 + commission. Thus, most you can lose is $2300 and there is no limit on your reward-- it could go as high as $4, or $100 per share.

If you short sell a 1000 shares of MCGI at 2.3, you will pay $2300 + commission. Here is the catch: you bet that the price will go down, so THEORETICALLY you can only make 100% of your investment if the price will go down to $0 (zero, null, nada, nic, vlere). THE PROBLEM: the price of the stock can go up infinitely, so you can lose the value of your whole account if you are not being careful. I recommend to never, ever, under no circumstance, leave the short position open without you looking at the price action and being ready to pull the trigger within seconds. If you still do not understand what short selling is or are confused about something, please leave a comment with your question and I will do my best to answer it.

If you understand the risk of short selling, you are half way there. In order to short a stock, you need to borrow shares from your broker. Below is the list of some brokers and how I go about borrowing shares from them.

Thinkorswim: their platform will tell you whether given stock is easy to borrow or hard to borrow by showing you ETB or HTB in the top right corner of the quote window. If it is ETB, you can just execute sell order which is equivalent of shorting. If it is HTB, you have two options: call them or chat with them live on the website. I generally prefer to chat with them as it is the easiest and most convenient for me. I connect with Trade desk, and say "Hi, do you have a 1000 shares of MCGI to borrow?." If they do not have shares, the person will say "none" or "none available." If they are available, the person you are speaking with will ask you for your account # and the price you want your order to be placed. I usually would reply with "Set sell lmt order at $x.xx"" -- I recommend to ALWAYS set your order higher than it is now at as sometimes it could take them 10 seconds and sometimes 2 minutes for your order to start working.

TD Ameritrade: there is no way to know whether the stock is short-able or not. You can try executing the sell order and it will either get executed or not. If not, you will be simply given an error message saying: rejected. Note that TD has implemented Thinkorswim's software recently so it might be possible to know whether it is short-able or not. I personally have not used TD for a while; I never liked TD and their high commissions.

E-trade: tired them in the past. My experience has been negative (but maybe they changed since then?). Just like with TD, you can't know whether it is short-able. You can try executing sell order and it will either be successful or rejected.

Sogotrade: You can know whether given stock is available to borrow by using this URL: http://www.gndt.com/support/shortlist.htm or simply calling them. The list is updated only once during a day so it is possible that shares of desired stock might be already borrowed and not available anymore. Generally speaking, in my experience, Sogotrade usually has shares to borrow of stocks you can't find with other brokers. Don't ask me why, I don't know...

I will add more brokers if anyone is interested.

- Kamil

Quick Post: Current Picks

There were so many new signals this weekend that I was still in the process of doing visual charts (Like this post).

Since life took over its hard to update and write a post on 18 charts so I will be short this time and just remind you that all picks (dates only) are always updated on the Current Picks page up on the top of the page.  Have a look.

Hope you all made money today.

-K