Investimonials Inspiration for InvestingFreak
I would like to take a few short minutes to Thank all the Freak-y readers for their support.
You can check out Investingfreaks' Investimonial page and leave a review for others to see so we can get more visibility.
There are currently two 5 star reviews and one email from a reader that found us through investimonials as well.
Here are what is being said about this blog.
Danny: "funny, sharp, witty blog and really timely notifications"
the creator of this blog warned his subscribers to be extra careful a couple days before the flash crash! check it out. go to the website and go back to may 6th and before! its a really funny blog too.
theres a nice little community of sharp traders at investingfreak. they share their trades and other speculations. really cool site, i love it
Tommy: "I bookmarked this site!"
This blog is great. The few traders that write for this thing are on point and comedic. That really helps keep the reading light and interesting. I wish they updated the blog more, but with all the market action that has been going on since the start of September. I can't blame them for that. When you find guys that are willing to share great information, take advantage of it.
Fetcher (via email)
You have to know that I truly enjoy using your blog. it's very useful and really effective tool for everyone! Actually I found it via investimonials.com, according to it your blog has few reviews but I think your blog deserves to be rated higher. So it would be a big step to ask your readers/visitors to leave reviews in investimonials.com.
Again I appreciate the voiced opinions because as much as I ask for comments in order to improve the site and content many just don't want to be bothered and pitch in.
One last thing is an update and apology. The last blog post before this was back in October and that is unacceptable but as Tommy mentioned about the market he is correct. (By the way I am long Blockbuster $BLOAQ, a January 165 Netflix $NFLX put which I acquired when Netflix was up at the $205 area a few days back)
I should begin posting more in the next few weeks. But if you are a reader you are urged to go to investimonials.com and write a review if you have something good to say. 
-K
When ETF’s don’t work ($VXX, $VIX)
We are all caught up in the new bubble that I would like to call the Great "Enron Task Force" (ETF).
Basically ETF's are usually set up to mimic indices that we cannot directly buy. That is a great way to stay invested and diversified if you believe the stock market in general will do good or bad. The number of Enron Task Forces is now reaching the gazillions and "investors" are so drawn into them that they are getting bigger and bigger and bigger (can you guess already?).
Here is SPY ETF compared to the index that it tries to replicate. (Click To Enlarge)
As you can see the mirroring effect is almost so perfect that by owning SPY shares you will make nearly the same percentage as how the S&P 500 has performed. Thats GREAT! It takes pain away from doing individual stock research. Of course if you still want to invest in specific stocks with minimal effort and AMAZING returns I would recommend Bear Sterns. After you have made millions in Bear Sterns get your attention back to this useless post.
Hey I have an Idea! I believe Volatility will increase and VIX index will keep going higher again. Hmm "Google Google on the wall whats the best ETF of them All?" Google: VXX for the win! So there you have it, if you want volatility there is an ETF for that. Alright time to cut to the chase because its nearing midnight. Click Below to Enlarge the Comparison between VIX and VXX.
Notice a Difference between the SPY comparison and the the VXX comparison? Gosh I hope so or get the FREAK out of here! They don't mirror each other AT ALL. They Barely did before last august and from then on its a whole different story. Speaking of stories... Thanks Dan for the heads up in the comments about the "VXX Reverse Split 1:4" story.
For those that are new to stock splits a quick search can yield a lot of information but I will spare that for you by explaining in my own words what will happen here.
When VXX reverse splits in the first week of November (lets assume its at $13 on that day) it will start showing up as a $52 instead. How can they just change the price? Well If you owned 4 shares of VXX now you will own just 1 later thats how.
Ok finally getting to the finish. A reverse split is bad because instead of increasing the amount of shares outstanding, the company is making this move to make the stock look like it has more value when in fact is the same crappy thing. I will not be playing VXX but seeing the "oh so perfect" mirroring effect it has done so far I congratulate those who will keep shorting it via whatever method works for them and reaping profits until VXX slashes in half once again.
Thats it for now and I hope that helped clear your question Dan. Volatility will not get a spark just because Barclays "Enron Task Force" will have a "higher price". If you're still confused or stumble upon other interesting things that you would like to share, the boxes are right below the post most of the time.
Happy Trading all and to all a good night!
-K
SPY’der Pig Spy’der Pig!
Well it surely has been a lifetime (one month) since I last posted but don't blame me much because life has become much busier and time consuming. Don't worry though I won't leave fellow freaks without some delicious charts before I return to the freakishly busy life of mine .
First off for some humor Here's my Inspiration to the awesome title.
Ok so without even mentioning any recent news because I really don't care if the Economy officially came out of recession last summer or if Larry Summers will finally leave his post at the end of the year because I am a technical trader and I like to trade what I see rather than what I hear. If I traded what I heard then I would be a BOOOYAH Cramerica Fan which would have made me millionaire by now if I had invested billions.
Lets start off with an hourly chart for the past 20 days of the SPY so we can see what happened while the blog was inactive.
I will not reveal the indicators of lines used in the chart but with some trial and error you might be able to figure it out . As you can see starting September 1st the market broke above the blue line while at the same time volume picked up and a special indicator went from red to green. SPY at the time was around 107 and today it reached a high of nearly 115.
Thats great and all as we see what happened in the past but what about the "Freak"ing future? I am not calling a market top yet but I must make my intentions known that if either 115 or 113 are broken on the hourly while the volume is there then that will determine the future. If I were to call it? I would say the volume increased the last two hours of today's trading thanks to Ben Balloonhead and the special indicator below is heading downhill (but still green). My ideal trade would be when SPY cuts below 113 and the indicator turns red. Remember that even if what I am preaching does not happen at least it is a more informed decision than pressing a "Buy Buy Buy, Sell Sell Sell" button. (Click Image below to Enlarge)
Next up we will visit something I like to call the Bollinger Bands and again I will not reveal the inputs but I hope you are understanding (you can always figure it out with some hard work), as you can see I have also shown the signals my system has given to me. I am awaiting for that Sell signal which might send SPY to 110's at the very least if it displays me that lovely red "S". of course there have been times where the market just consolidates along the blue lines and then moves up in which case I wouldn't enter until I see my system print the signals while I also evaluate the chart already posted above.
Are you falling asleep yet? If so you aren't a real Investing Freak because only the elite know that without doing your homework you will go into the market like a headless chicken and come out a loser. Now Time to introduce the updated Investing Freak special chart which I last displayed back in June. If you click on the link and go to that post you will see a "price line" drawn near 1152 (it's really just a bit over 1150 if you get microscopical), I mention that because today the market reached up to 1048.59 and retreated a full 10 points! 10 points is a sweet intra-day move which you can make a killing on if you play it right. Anyways here is the updated chart since I can see you falling asleep. (Click below to Enlarge)
Recap: I've been busy, market has been behaving according to plan and is not showing more negative signs than positive but no definite reversal has been noticed so just use the charts above for reference. If they are helpful, you are welcome to post comments so we can liven up the blog again.
Until next post.... Enjoy Making money!!
-K
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
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 Cares about the small people
As you might have figured out by now, BP plc (ADR) Chairman and the CEO met with President Obama ONLY two months after the oil spill disaster.
Of course as I mentioned in the previous post BP now stands for Bad Publicity so nothing was unexpected on my end when the Chairman said: "I hear comments sometimes that large oil companies are greedy companies or don’t care, but that is not the case with BP. We care about the small people." Bad publicity this time will cause BP to buy google ads for keywords such as petite, small, midgets, oompa loompa. They needed a leprechaun to give them some lucky charms but now they insulted the small guy.
Did you hear that? BP cares about you so much that if you are in the Gulf of Mexico and for the next century your fishing or tourism business is doomed.. BP has put together $20 billion dollar fund for your damage It is truly truly truly sorry. Oh and If you weren't affected by BP but are part of US pension funds – including Calpers, the Teacher Retirement System of Texas and Ohio Public Employees Retirement System then BP is truly truly truly sorry for you as well because the 12% dividend yield that you saw a few days ago will be reduced to 0% so they can spread that wealth to the victims. You can enjoy your -50% gain in BP stock now.
But wait I forgot to mention one benefit of this disaster. BP has hired cleanup workers to clean things up and this good news for the people of the Gulf. Hey you just got promoted from fisherman to fish rescuer, Congrats!! Just sign here on the dotted line ........... and just make sure to not get sea sick from the delicious fumes because your complaints and health information will never be part of BP's record.
BP attempted to deny and conceal links of its oil spill to illnesses, after initial reports of oil cleanup workers who were getting sick due to extended exposure to oil and dispersants. Fishermen have complained of “severe headaches, dizziness, nausea and difficulty breathing” after working to clean up the spill, and one said BP did not provide protective equipment. But BP CEO Tony Hayward brushed off illness concerns, suggesting “food poisoning” might have been the culprit.
Although Louisiana state records indicate that at least 74 oil spill workers have complained of becoming sick after exposure to pollutants, BP’s own official recordkeeping notes just two such incidents.
You all should feel sorry for BP Because it will take anywhere from 100 days to 365 days for BP to make back the $20 billion in profit while the victims sit at home and receive checks.
Ok fine that's less than a year's worth of profits... But this is just a fund for economic damage, and won't protect it against all sorts of other legal costs. According to NYT legal costs and criminal fees could hit at least $63 billion. WHOOPS! Hey NYSE:BP stock... you will be missed when you hit $19 but on the bright side! You'll be a teenager again full of energy (pun intended) !
And now for a mini change of subject. Senate has now accepted an expanded Fed audit. The House proposal allows repeated future audits of discount window and open market transactions, whereas the Senate proposal had only allowed a one-time audit. Of course this is just a grain of salt and even when it's passed it might be years before we see any audits.
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
1077 Proves to be $SPX resistance again.
Going into the open today 1077 was on the radar as a heavy resistance. It will now try to become a death cross of two averages i use that can be seen as the blue and red lines in the Special Investing Freak $SPX chart.
As for what happened today I decided it is best to sum it up using this image and text. (Click To Enlarge)
I bought Puts early on then called top of 1077 in a comment at around 10:50 with the top on the market coming at around 11:30 where I decided it was time to make true to my preaching and sell my calls. Sold puts at end of day and am flat for the next day opening so i can sleep well 
Keep checking the comments for latest news and talk and feel free to participate (dont be shy)
-K
Let's just say
Germany Tries to save the day AGAIN -2008 Part 2 Begins-
So today Germany's Merkel decided to pull a good trick over the nekkid shorts.
There is much surprise that the German government has declared a ban on naked short selling, including CDS, as of midnight tonight, with no prior notice or the niceties demanded by the banks when government chooses to act. This action seems to have perturbed some and confused many.
Germany is claiming that this move will stop the Speculators
The ban will also apply to naked short selling in shares of 10 banks and insurers that will last until March 31, 2011, German financial regulator BaFin said today in an e-mailed statement. The step was needed because of “exceptional volatility” in euro-area bonds, the regulator said.
HMMM Where oh Where Have I heard this story before... Oh Yeahh.. September 20, 2008 German regulator bans short-selling in financial stocks
Germany on Saturday halted short-selling in financial shares, when investors borrow company stock to sell it, following the example of Britain and the United States. The ban affects 11 shares including those of AAreal Bank, Allianz, AMB Generali, Commerzbank, Deutsche Bank, Deutsche Boerse, Deutsche Postbank, Hannover Re, Hypo Real Estate, MLP and Munich Re. BaFin, said short sales were banned with immediate effect until the end of the year, underscoring that they could lead to huge losses in the current global financial turmoil.
Roll Back to May 18, 2010....
Allianz SE, Deutsche Bank AG, Commerzbank AG, Deutsche Boerse AG, Deutsche Postbank AG, Muenchener Rueckversicherungs AG, Hannover Rueckversicherungs AG, Generali Deutschland Holding AG, MLP AG and Aareal Bank AG are covered by the short-selling ban. “Massive” short-selling was leading to excessive price movements which “could endanger the stability of the entire financial system,” BaFin said in the statement.
I wonder what happened last time they tried protecting the banks? Well I will examine it below but what's that I hear you say? This Time is Different? It sure is!!
During the last Crisis we had Lehman go bankrupt and Bear Stearns collapse. Two years later we don't have any financial institutions going down. We Have Countries that are crumbling and their "shareholders" (taxpayers and citizens) revolting. Greece is Bear Stearns because of the trillion dollar bailout and Portugal might as well become Lehman because unless Europe is willing to print a trillion for every country they bail (which I know they can if they want) and euro dropping to parity and beyond with the dollar.... someone will have to hold the bankruptcy stick.
Anyways Lets look at how the last short selling ban affected the financial institutions they tried to protect.
I'm using Dow Jones Germany Index for a Benchmark as to compare returns.
| Company | Sept to Dec 2008 | May 2010 – March 2011 |
| Dow Jones Germany Index (USD) DEDOWD | -23% | TO |
| Allianz SE AVL | -30% | BE |
| Aareal Bank AG ARL | -64% | FILLED |
| Commerzbank AG CBK | -61% | OUT |
| Deutsche Bank AG DBK | -50% | ON |
| Deutsche Boerse AG DB1 | -15% | APRIL |
| Deutsche Postbank AG DPB | -65% | 2011 |
| Hannover Rueckversicherung AG HNR1 | -18% | WHEN |
| MLP AG MLP | -26% | BAN |
| Muenchener Rueckversicherungs-Ges. AG MUV2 | +7% | ENDS |
Oh myyyyyy Germany Saved the day as speculators were on the sidelines watching and missing out on 18 to 65% gains (its what you do when you short and if you're not familiar just Google "selling stocks short")
The Previous ban was 3 months and the protected stocks crashed an average of 46%. The New Ban will be around 11 months and will crash how much? It will crash aplenty so I will not make an exact percentage call on this one. But I will be doing one thing this time around though. I'm putting German Financials on a Bank Watch List that I will check back on April 1st 2011.
Make plenty of money these next few weeks even if my blogging is sporiadic at best. (Offline life always comes first)
-K
Mother Nature Shorts the Market: Volcano errupts, Cramer Says the Recovery is Real
Mother nature is fed up with the mountainous stock market climb and the Icelandic Volcano has finally put a top to it.
There have been many canceled flights across Europe and airliners will be feeling the effects of the volcano for at least a quarter if not more. This is one of those news items that is still not priced into the market (at least wasn't as of 4pm closing bell) so shorting an international Airliner should yield results (British Airways or AirFrance perhaps).
This is not just a minor news article as many airports have yet to close but will have to as the ash travels farther from its origin. According to BBC "Such a large eruption... would have the potential to severely affect air travel at high northern latitudes for six months or more. "In relation to the current eruption, it is worth noting that the last eruption of Eyjafjallajoekull lasted more than 12 months."
This could be a major win for global warming activists because it might cool us down according to an article in the Guardian that states "The dust can also help reduce global warming. The effect of the Iceland ash cloud will be small but larger eruptions help to cool the planet as they reflect sunlight back into space. The 1815 eruption of Mt Tambora in Indonesia produced so much volcanic ash that it triggered the "year without a summer" that brought widespread failure of harvests across Europe, famine and economic collapse."
Now that we established Mother nature's attempt to stagnate or destroy the economy lets turn our heads to the lovely Jim Cramer who tells us that the Recovery Is Real!
"Maybe this time, the recovery is better, Maybe it's healthier and more sustaining. Maybe this time we've got it right, not wrong, and Maybe the recovery will be responsible and Maybe fueled by a longer-term health in the consumer, and Maybe it will not be turbocharged bad lending." Now I added a few more maybes on my own to emphasize that Maybe the recovery is real and Maybe Cramer is a genius.
We know mother nature is short and Cramer is long. Lets take a look at some economic data domestically and around the world.
US Economy:
March Foreclosure Activity Highest on Record (Calculated Risk)
7 million households are behind on their mortgages. Now that the worst of the financial crisis appears to be over, banks are finally stepping up the foreclosure process again. Foreclosure filings were reported on 367,056 properties in March, an increase of nearly 19 percent from the previous month, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.
Weekly Initial Unemployment Claims Increase to 484,000 (The Big Picture)
Today’s Unemployment Insurance claims “unexpectedly” spiked to 484k vs. a 440k consensus, and were 24k higher than last week. Lets get to the excuses as to why the weekly claims for unemployment insurance are not dropping as quickly as everyone would like. "A Labor Department economist said this latest rise can be pegged to lag effects from the spring holidays, including Easter and Cesar Chavez Day, which is celebrated in worker-heavy California." If that puts a dent in employment then here are the Holidays: Thanksgiving, Christmas, MLK Jr. Day, snow storms, Easter, Cesar Chavez. Upcoming next week are Administrative Professionals Day and Take Your Children to Work Day, so fear not when UI claims breach 500k again.
Empire Manufacturing Index Soars (Econompic)
A gauge of manufacturing in New York State rose to a six-month high in April as new orders advanced and employment continued to improve, the New York Federal Reserve said in a report on Thursday. The New York Fed's "Empire State" general business conditions index rose to 31.86 in April, the highest since October and up from 22.86 in March. Economists polled by Reuters had expected a figure of 24.
World Economy:
Greece On Verge Of Activating Rescue Package (Zero Hedge)
A senior Greek Finance Ministry official told Market News that With the call for a meeting today, Greece is seeking to iron out “immediately” exactly what the details of the joint EMU-IMF plan will be, and what fiscal, macroeconomic and other conditions will be imposed on Greece in exchange for the aid. Last weekend Greece issued $2.1 billion in Bills, which auction by the way bankingnews.gr recently reported was a scam, with half the bids being fake!
Israel accuses Syria of arming Hezbollah(AFP)
Israeli President Shimon Peres on Tuesday accused Syria of supplying Scud missiles to the Lebanese militant group Hezbollah while publicly talking peace.
"Syria claims it wants peace while at the same time it delivers Scuds to Hezbollah whose only goal is to threaten the state of Israel," Peres told public radio.
Have a good night.
-K