Rotation With a Rising Tide Shows Strength: Sector Review 10-31-11

Written By: DragonFly Capital

The past week did a lot to reveal the strength of the current market. But you need to look at it from the proper perspective to see it. Two themes help to make my point. First, a rising tide lifts all boats. In a strong market all sectors will rise. The second is the concept of sector rotation. As a market moves through phases there is rotation from defensive sectors that have been leading the market at the recent bottom into the riskier sectors that had been hit the hardest. Let’s take a look.

Former Leaders

Three sectors that had been among the best performers had the worst week. The Utilities Select Sector SPDR, $ XLU, shown below, along with the Consumer Staples Select Sector SPDR, $ XLP and Consumer Discretionary Select Sector SPDR, $ XLY all rose less than 1% for the week. They all still look very strong with rising Relative Strength Indexes (RSI) and positive and increasing Moving Average Convergence Divergence (MACD) indicators to go along with all

Utilities Select Sector SPDR, $ XLU

being over their rising Simple Moving Averages (SMA). But the doji candles for the week suggest indecision going forward or a pause to reassess. The tide rose and took them higher, but they are no longer leading.

Solid Performers

Two other sectors the Technology Select Sector SPDR, $ XLK and Health Care Select Sector SPDR, $ XLV, continued to be solid performers last week each moving about 3.5% higher. The $ XLV, shown below, moved higher with the MACD crossing positive and the RSI nearing the 60 level. They are solidly above the SMA’s now and heading to the top of the Bollinger band range

Health Care Select Sector SPDR, $ XLV

and the highs of the year. But this is where the proper perspective comes in. Using these solid performers as the benchmark for performance for the week the former leaders above under performed by over 2%. This group should be used to measure the effect of the rising tide. With that in mind look at the remaining sectors.

Rotation Winners

The big winners then against that benchmark, the Materials Select Sector SPDR, $ XLB, below, Energy Select Sector SPDR, $ XLE, Financials Select Sector SPDR, $ XLF and Industrials Select Sector SPDR, $ XLI, all outperformed the rising tide by 2-4%. in fact the sectors that had been hit the worst had the best week. They all have RSI’s that are moving through the mid line towards bullish territory and MACD’s that are crossing positive. Clear rotation into these sectors.

Materials Select Sector SPDR, $ XLB

Putting the whole picture together then, shows the rising tide lifting the solid performing sectors and the rest of the market about 3.5% along with a corresponding sector rotation out of the defensive sectors that had been the leaders and into the badly beaten down sectors. Rotation with a rising tide. Broad strength.

If you like what you see sign up for deeper analysis and more ideas using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.

Dragonfly Capital

Why aren’t SSD or hybrid disk drives more popular in laptop computers?

Given that the SSD or hybrid disk drive (e.g., Seagate Momentus) would seem to be ideal for laptop computers, why aren’t they more popular? To research this posting, I visited the HP and Dell sites and looked at their high-end 17″ laptops. Neither was available with a hybrid drive (Seagate says that 1 million have been shipped, which sounds great but that’s a negligible market share), despite the fact that these retail for as little as $ 108 at Amazon.com (see Seagate Momentus XT 250 GB). HP and Dell charge approximately $ 600 extra for an SSD over a conventional hard drive, despite the fact 256 GB hard drives retail for as little as $ 365 at Amazon (e.g., Crucial 256GB m4 SSD). Why wouldn’t a notebook computer maker want to encourage SSD sales so that they can (1) have consumers talk about how fast their new Brand X laptop is, (2) reduce failure and return rates, and (3) cut down on build time (presumably it is faster to load an OS onto an SSD-based laptop)? So one would naively think that Dell and HP would not mark up an SSD more than a retailer such as Amazon or Newegg.

Philip Greenspun’s Weblog

Updating the Breakdown in Bond Funds TLT and IEF

If you’re looking at the Stock Market only, you’re likely missing the other side of the coin which is the Bond Market.

With the recent surge through resistance in stocks, let’s get a check-up on the break under support in popular bond funds TLT and IEF.

First, the 20+ Year TLT:

Let’s start with the basics and move from there.

Bonds surged, breaking overhead resistance in August at the same time stocks ‘collapsed,’ and Bonds reached targets beyond what many traders thought was possible.

After such a strong rally, odds favor a retracement (at best) or even reversal of trend, which was confirmed by the negative dual divergences in both volume and momentum (the picture is clearer in IEF below).

The TLT fund peaked at $ 125 and has been heading lower in conjunction with a “bottomed” stock market rocketing higher and higher.

The first sell signal came on the break of the rising 20d EMA at $ 117.50, and the second signal triggered Thursday with a breakdown and close under the rising 50d EMA and 38.2% “short-term” Fibonacci grid.

That puts bonds on a downward path to test lower support levels, including the Fibonacci confluence here at $ 110 (‘bigger’ 38.2% level), and if this confluence target fails here, we’d be looking to the middle confluence at $ 105.

Keep those levels in mind in the event we do continue to see lower and lower bond (fund) prices, which almost certainly will correspond with higher stock prices (particularly if the S&P 500 can close above 1,300).

As mentioned, the picture is similar in the 7 to 10 year IEF Fund:

I believe the negative divergence show up clearer on the IEF fund, but you be the judge.

It’s a lesson on how divergences undercut (fail to confirm) new price highs, putting traders on the defensive (taking profits) or short-selling in anticipation of a potential reversal (aggressive strategy).

Similarly, the first “confirmed” sell signal came on the break of the rising 20d EMA at $ 104 which was followed up immediately with a break/close under the 50 EMA (ahead of the TLT).

Thursday gave us a fresh sell signal in the form of the breakdown under horizontal trendline support (price) and the 38.2% Fibonacci line as drawn.

Longer-term, $ 97 is a reasonable confluence target (price and the 200d SMA) if stocks continue their upward bounce (and of course, bonds continue their downward swing).

Continue watching these levels in conjunction with what’s happening in the Stock Market.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available!


Afraid to Trade.com Blog

Top Trade Ideas for the Week of October 31, 2011: The Rest

Written By: DragonFly Capital

Here are the Rest of the Top 10:

Domino’s Pizza, Ticker: $ DPZ

Domino’s Pizza, $ DPZ, is in a bull flag after breaking above the ascending wedge. As it sits there the Relative Strength Index (RSI) remains bullish and the Moving Average Convergence Divergence (MACD) is fading with the volume, typical of a flag. On a move above 33 the target on a Measured Move (MM) is 36.15.

Exact Sciences, Ticker: $ EXAS

Exact Sciences, $ EXAS, is in a bull flag between 7.75 and 8.25 after a move higher off of a bottom at 6.06. A break of the flag higher has a MM higher to 10.30. The RSI is holding bullish over the mid line but the MACD is fading. Support is tight under flag at 7.50 and then 7.00. Short interest is high at over 13% and it reports earnings Thursday before the open.

Gilead Sciences, Ticker: $ GILD

Gilead Sciences, $ GILD, is moving up to resistance at the 43.10 area after reporting earnings last week. The RSI is trending higher and the MACD is positive as it reaches it. Over the resistance the center of the previous symmetrical triangle at 46 is the target.

Jabil Circuit, Ticker: $ JBL

Jabil Circuit, $ JBL, is moving back up to previous resistance at 22. As it hits that resistance the RSI is trending higher and the MACD is starting to rise. If it can get over 22 then there is resistance at 23 and then a target of 26 from the previous consolidation range.

Mechel OAO, Ticker: $ MTL

Mechel OAO, $ MTL, has been moving higher and looks strong. The RSI is rising strongly and the MACD is increasing as it goes higher. On a move over 14.50 it is a stair step up to 20 or higher. Hop on board.

Up Next: Bonus Idea

The Best

If you want to know how I would trade these names and for more ideas and deeper analysis, use the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.

After reviewing over 900 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Saturday which as we head into the last 2 months of the year looked for Gold and Crude Oil ready to continue higher with a chance that Gold consolidates the recent gains. On the other hand the US Dollar and US Treasuries are set up to continue lower. The Shanghai Composite is showing signs of a reversal higher while Emerging Markets also look higher, but since they are at resistance may consolidate. Volatility looks to continue lower supporting further upside for the US Equity Index ETF’s SPY, IWM and QQQ. US Markets all had a good run last week and it would not be a surprise to see a pullback to consolidate the gains. The QQQ looks the strongest with a steady trend higher while the IWM exhibiting topping tails and largest move for the week the most vulnerable. Despite that they all have confirmed the trend higher. Continue to watch the US Dollar and US Treasuries for signs of a reversal that could halt the Equity run higher. Use this information as you prepare for the coming week and trade’m well.

Dragonfly Capital

How can the Fed precommit to a permanent expansion of the money supply ?

A challenge for monetary authorities in a liquidity trap is that it is hard convince people that they won’t reverse expansionary policies as soon as the economy leaves the liquidity trap. The other problem is that they can’t do much other than affect expectations while the economy is in a liquidity trap. This suggests that they can’t do much at all. This argument assumes model consistent expectations (aka rational expectations) but that doesn’t mean it is totally wrong.

My view has been that the key word is “Much” and that the monetary authority can also bear risk. In particular, I think that the Fed can and should bear mortgage default risk by buying mortgage backed securities.

The disadvantage of this approach is that, if house prices and/or GDP tank, then the Fed’s balance sheet won’t balance. It would not be possible for the Fed to retire as much of its obligations as it might choose, because they are worth more than its assets.

This disadvantage is an advantage. It means if things turn out to be worse than expected, then the Fed will not be able to reverse the expansion of the money supply. This means that, if the Fed loses on its investments, then, when the economy recovers, there will be higher than target inflation — the Fed would like to reduce the money supply but won’t be able to do so.

I think this is exactly what the economy needs. The disadvantage of Fed purchases of risky assets is, in fact, a huge advantage.

If the Fed wins its bet, we win (it would transfer the profits to the Treasury). If the Fed loses its bet, we win (it would automatically commit to high inflation even if when the inflation comes the Fed wants lower inflation).

OK Ken, the ball’s in your court.


Angry Bear

Where is my arc?

Guest Post from SMB Blog Reader Yaniv Hamo

One of my favorite thinking exercises is about what it means to be living as opposed to merely exist. The
essence of what separates the living from the grey masses. Working 9?5, family and kids, watching TV
and going on trips – does not make the cut. That’s what the masses are doing.

For years I used to think that the answer is “change”. If I change, then I am alive. If I keep stable, I am
reduced to existing only. Biologist Jack Cohen phrased it nicely when he said “There is this special
biologist word we use for ’stable’. It is ‘dead’.”. Constantly changing, regularly getting out of one’s
comfort zone, could be the key. So “living = changing”.

Then one day, at the annual motor show in Geneva, I saw something that has made me rethink this
definition. What I saw was a Bugatti Veyron, completely made of blue carbon fiber, apparently
manufactured especially for that exhibition. There was also a small price tag next to one of the wheels –
it was to the tune of two million euros, nothing special here. What got me thinking was a small writing
on the tag, in black pen – “sold”.

Someone was strolling around looking at the cars on display, liked the blue one, and then asked the
attendant to please order it to go. There was one thing I could tell for sure about that someone, without
knowing them – at some point in their lives, they did not work 9?5 and watched TV with their family.
They did something more. They could have inherited the money (although less than 10% of the multimillionaires
do), or they may have been top criminals, but if we assume for one moment they are self made,
honest people – and there are enough of these – then it becomes clear that what separates them
from the crowd is: risk.

As some point, these individuals had to assume a non?trivial risk. Otherwise, anyone would have made
it. Risk is the fence that keeps the grey masses from exiting the meadows. People are afraid of taking
risks, more than they are afraid to change. Afraid to put aside the safety of their 9?5 jobs, be it even for
one month. Yet achieving extraordinary things (and I am not talking about cars anymore) cannot be
done from the comfort of a safe, ordinary life.

Since people can change in a variety of meaningless ways, thereby walking around my first definition, I
changed it to “living = taking risks”. I was happy with this definition for a while. Recently I decided to
replace it again. What bothered me the most about it, is that it implies that one needs to keep on
assuming risks, otherwise they are “dead”. There is a better answer, one that was there in front of me
the whole time.

Many of us study, or acquire skill, at one point in life. It takes several years, where we are going through
a learning curve with the help of a teacher or mentor, until we reach the end where a profession awaits
us. It is this profession that is used for that dreaded 9?5 job. Now look around you, and count how many
professionals you know who have assumed another 5?years or longer learning curve.

Such individuals are becoming increasingly rare. In general, our attention span is shrinking, and just the
thought of starting a 5 years path can cause some people to panic. Think about it – 20 years ago it was
still common to write physical letters to one another. Multi page letters, full with colorful descriptions
and decorations, text in the corners, text in diagonal, the page could take it all. Then we moved to
emails. Lost the creativity in presentation, but retained most of the expressive power of the original
letters.

Next came the SMS, and our brains started getting accustomed to splitting thoughts to 160 characters
segments. After a while, reading a mass of text started to become a challenge, our brains got used to
information in chunks of 160 characters and would dose off reading paper letters from the past. Twitter
came with 140 character limit to relieve some of the processing pain. But it was Facebook who
popularized the shortest unit of communication ? “Like”. Now we can communicate using just one bit,
which reduces our attention span even more.

Short attention span demands immediate satisfaction, our brain is constantly seeking external
stimulation to keep interested, this constant stream of small chunks of information. A study I recently
read shows that while watching a video, the brain activity spikes whenever there is a new scene. While
keeping at the same scene, it gradually lessens. Producers of movies and commercials know and exploit
this fact – they use frequent cuts and fast camera movements to keep giving our brains these addictive
spikes. Otherwise, we will wander off. Put on an action movie from the 80’s, say “The Escape from New
York”, and you’ll see what I mean.

To transcend from existing as a reactive entity, digesting and emitting small chunks of information, to a
living human being, we need an arc. We need to be on a learning curve, a 5+ years path in which we
persist amidst the increasing background noise of modern life. When we reach the end of that curve, we
need to assume another one lest we fall into the abyss of the grey masses. There are plenty of learning
curves around, covering all disciplines. I picked the one of trading the financial markets. To paraphrase
on the words of Christopher from The Sopranos ? where is your arc?

“Where is my arc?”One of my favorite thinking exercises is about what it means to be living as opposed to merely exist. Theessence of what separates the living from the grey masses. Working 9?5, family and kids, watching TVand going on trips – does not make the cut. That’s what the masses are doing.

For years I used to think that the answer is “change”. If I change, then I am alive. If I keep stable, I am reduced to existing only. Biologist Jack Cohen phrased it nicely when he said “There is this specialbiologist word we use for ’stable’. It is ‘dead’.”. Constantly changing, regularly getting out of one’s comfort zone, could be the key. So “living = changing”.

Then one day, at the annual motor show in Geneva, I saw something that has made me rethink this definition. What I saw was a Bugatti Veyron, completely made of blue carbon fiber, apparently manufactured especially for that exhibition. There was also a small price tag next to one of the wheels –it was to the tune of two million euros, nothing special here. What got me thinking was a small writing on the tag, in black pen – “sold”.

Someone was strolling around looking at the cars on display, liked the blue one, and then asked the attendant to please order it to go. There was one thing I could tell for sure about that someone, without knowing them – at some point in their lives, they did not work 9?5 and watched TV with their family.They did something more. They could have inherited the money (although less than 10% of the multimillionaires do), or they may have been top criminals, but if we assume for one moment they are self made,honest people – and there are enough of these – then it becomes clear that what separates them from the crowd is: risk.

As some point, these individuals had to assume a non?trivial risk. Otherwise, anyone would have made it. Risk is the fence that keeps the grey masses from exiting the meadows. People are afraid of taking risks, more than they are afraid to change. Afraid to put aside the safety of their 9?5 jobs, be it even for one month. Yet achieving extraordinary things (and I am not talking about cars anymore) cannot be done from the comfort of a safe, ordinary life.

Since people can change in a variety of meaningless ways, thereby walking around my first definition, Ic hanged it to “living = taking risks”. I was happy with this definition for a while. Recently I decided to replace it again. What bothered me the most about it, is that it implies that one needs to keep on assuming risks, otherwise they are “dead”. There is a better answer, one that was there in front of me the whole time.

Many of us study, or acquire skill, at one point in life. It takes several years, where we are going through a learning curve with the help of a teacher or mentor, until we reach the end where a profession awaits us. It is this profession that is used for that dreaded 9?5 job. Now look around you, and count how manyprofessionals you know who have assumed another 5?years or longer learning curve.

Such individuals are becoming increasingly rare. In general, our attention span is shrinking, and just the thought of starting a 5 years path can cause some people to panic. Think about it – 20 years ago it was still common to write physical letters to one another. Multi-page letters, full with colorful descriptions and decorations, text in the corners, text in diagonal, the page could take it all. Then we moved to emails. Lost the creativity in presentation, but retained most of the expressive power of the original letters.

Next came the SMS, and our brains started getting accustomed to splitting thoughts to 160 characters segments. After a while, reading a mass of text started to become a challenge, our brains got used to information in chunks of 160 characters and would dose off reading paper letters from the past. Twitter came with 140 character limit to relieve some of the processing pain. But it was Facebook who popularized the shortest unit of communication ? “Like”. Now we can communicate using just one bit,which reduces our attention span even more.

Short attention span demands immediate satisfaction, our brain is constantly seeking external stimulation to keep interested, this constant stream of small chunks of information. A study I recently read shows that while watching a video, the brain activity spikes whenever there is a new scene. While keeping at the same scene, it gradually lessens. Producers of movies and commercials know and exploit this fact – they use frequent cuts and fast camera movements to keep giving our brains these addictive spikes. Otherwise, we will wander off. Put on an action movie from the 80’s, say “The Escape from NewYork”, and you’ll see what I mean.

To transcend from existing as a reactive entity, digesting and emitting small chunks of information, to a living human being, we need an arc. We need to be on a learning curve, a 5+ years path in which we persist amidst the increasing background noise of modern life. When we reach the end of that curve, we need to assume another one lest we fall into the abyss of the grey masses. There are plenty of learning curves around, covering all disciplines. I picked the one of trading the financial markets. To paraphrase on the words of Christopher from The Sopranos ? where is your arc?

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SMB Capital – Day Trading Blog

Quick Charting the Levels to Watch in Copper and JJC

We’ve been seeing copper in the news lately, mainly with its recent breakdown and consolidation off a key support level.

Let’s take a look at the weekly frame then drill-down to daily chart levels to watch in both Copper and the related ETF JJC.

First, the Weekly Chart of Copper:

A quick glance of the current chart shows the simple $ 3.0 level as a longer-term key level.  It’s not magical, it’s just a ’round number’ level where price has reversed in the past – including September and October 2011.

In addition to a pure price level, the 200 week SMA resides at $ 3.22 which is a level to watch in conjunction with $ 3.0.

The other quick thing to note on the Weekly chart is the bearish cross of the 20/50 EMAs which cluster about the $ 3.8 level, which happens to be another key price level to watch, as price has bounced three times from the $ 3.8 support (it may prove to be resistance in the future).

With the Weekly Chart structure above, let’s now drop to the Daily Chart to see the current levels to watch:

The Daily Chart gives us a bit more clarity about the key simple price levels to watch – it’s $ 3.0 for confluence support and the $ 3.9 area for upper resistance.

The immediate level for traders – especially those looking for a confirmation breakout trade to the upside – is the loose cluster from $ 3.5 (prior price swing highs along with the Upper Bollinger Band) to $ 3.6 (the falling 50d EMA).

A firm power-breakout above these resistance levels will likely be seen as a BUY signal, along with a “cover-shorts” signal.

Those will be key level to watch immediately – the confluence overhead resistance at $ 3.5 to $ 3.6 (which, if broken, targets $ 3.9) and the long-term critical support at $ 3.0.

Here are the corresponding price levels in the related Copper ETF – JJC:

A quick check-up shows us a similar structure:

Immediate resistance exists at $ 45 (price and upper Bollinger Band) and $ 46.50 (falling 50d EMA).

Above the $ 45/$ 46 resistance is the upper key target $ 51 level (a potential target to play for on a closing breakout above the $ 45 then $ 46.50 level) and beneath the current ‘range’ resistance is the critical support at $ 39.00 per share (double bottom).

Keep watching these levels along with any follow-through on any breakout that occurs… otherwise, without a breakthrough here, it would suggest the lower support may be re-tested.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available!


Afraid to Trade.com Blog

Rick Perry’s 20-20 Vision

Charles Pierce sums up the true issue:

It is on days like this that I don’t envy political economists. They’re the ones that are going to have to take this Message from Goobertown seriously. They’re going to have to score it. They’re going to have to do the math, such as it is, and try to find a coherent formation in this unwieldy parade of hackneyed talking points (Kill the Estate Tax and Save the Family Farm!) and tired applause lines (The Job Creators Are Uncertain!). They’re the ones who are going to have to find a way to square the utter abandonment of the progressive income tax, a balanced-budget amendment to the Constitution, a return to explosively inflationary health-care costs, an unchained and undoubtedly newly amok financial-services industry, and the partial privatization of Social Security, all of which Goodhair has managed to wedge into “Cap, Balance, and Grow (!).”

(By now, I figure the political economists are going to be hopelessly drunk and firing rubber bands at each other.)

They’re the ones who are going to have to tell the family of the sad-eyed young intern in the corner that their son, a Wharton grad with a brilliant future, studied this plan for a couple of hours and then screamed, “But it doesn’t make sense!” prior to trying to feed himself into the fax machine in a vain attempt to get as far as possible from any place where this nonsense is taken seriously.

Personally speaking, I’m not bothering. When you’ve already lost Pete Davis, you can pretty much give up on anyone believing your economics will work.

And Andrew Samwick piles on with the politics:

And now we have another version of the flat tax, as if the crushing irrelevance of Steve Forbes to the primaries in 1996 and 2000 were not an indication of how unproductive the discussion will ultimately be. What are the prospects that a Republican President would actually be able to implement such a change if elected? They are equal to the chance that Republicans will both retain control of the House and secure a filibuster-proof majority in the Senate in 2012. In other words, absolutely zero.

Personally speaking, I don’t think the odds on that election scenario are “absolutely zero” (but I count people like Ben Nelson, who fellated George W Bush from the beginning, referring to him in interviews as “the King,” as part of that “filibuster-proof majority”). But the rest of the analysis is spot-on.


Angry Bear

3 Utilities Near All Time Highs and Set Up to Go Higher

Written By: DragonFly Capital

If the broad market is so strong then why is it that defensive stocks are making all time highs? Last night I profiled 4 healthcare companies that have strong charts, with 3 making new all time highs (there is a link to that article below). Tonight lets look at three companies in the utility sector that are set up to break higher and near all time highs.

American Electric Power, $ AEP

American Electric Power, $ AEP, is testing the resistance of a rising trendline for the fourth time since May. It is still about 5% off of it’s 2007 highs, but is at its highest levels in nearly 4 years. As it hits this resistance, which can also be viewed as the neckline of an Inverse Head and Shoulders the Relative Strength Index (RSI) is moving through 60 and the Moving Average Convergence Divergence (MACD) indicator is positive and looks to be growing again. All of the Simple Moving Averages are sloping higher. A bullish set up. If it breaks the resistance the target move on the Inverse Head and Shoulders is to at least 44.71 which would be a new high. If that was not enough it carries a 4.8% dividend as well.

Consolidated Edison, $ ED

Consolidated Edison, $ ED, is at new highs and breaking higher. As it moves through resistance of the Double Top at 58.20-58.60, the RSI is rising and the MACD is increasing. Both support further upside as do the rising SMA’s. It has a target of 63 on a Measured Move (MM) higher.

Hawaiian Electric Industries, $ HE

Hawaiian Electric Industries, $ HE, broke through a resistance area from 24.50 to 24.70 and is now consolidating over it. This also marks the neckline of an Inverse Head and Shoulders pattern with a target of at least 29.00. The Relative Strength Index (RSI) has held above the mid line since rising there in August and the MACD is positive. This has the highest dividend yield of the three at 5.00%.

Healthcare Debate – Higher or Lower

If you want to know how I would trade these names and for more ideas and deeper analysis, use the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.

Dragonfly Capital

Steve Jobs and the Age of User Experience

Among the achievements of Steve Jobs, the elevation of user experience design to the point that we might almost call this the Age of User Experience. Let’s consider the iPhone. Here are the technologies that went into making it a practical consumer item:

  • plastic molding (Leo Baekeland)
  • stored-program computer (Turing, von Neumann)
  • transistor (Bell Labs)
  • integrated circuit (Fairchild)
  • LCD screen (RCA, Westinghouse)
  • cell phone network (Bell Labs, Nokia, Motorola, Siemens, Ericsson)
  • Global Positioning System (U.S. military)
  • pocket computer (Sharp, Palm, Apple Newton, others?)
  • multi-tasking operating system (MIT)
  • Unix (Bell Labs)
  • graphical user interface (Xerox PARC)
  • MP3 player (various)
  • app phone (Danger (became T-Mobile Sidekick))

Aside from the pocket computer, neither Apple nor Steve Jobs had anything to do with the development of any of these technologies, yet details that an engineer would regard as tiny turned out to make a huge difference in market acceptance and profitability. Business managers can no longer ignore such details.

Anyone today who has a job in user experience should therefore thank Steve Jobs.

Philip Greenspun’s Weblog

One Good Trade (PLCM)

I struggled with RVBD. I struggled in LRCX. Same with CREE. And ABT. And BAX. My EBAY trade did not work out as I expected. Nor CRUS. I was sitting in my office a few minutes ago talking to a frustrated mentee saying:

“I cannot seem to make money in anything.”
“Others around me seem to be making money except me.”

As you can see above there is a lot for me to be frustrated about with my trading if not for catching PLCM. Yesterday there was a lot for me to be frustrated about with my trading if not for catching ABT.

The truth not seen on cable TV is professional traders are wrong an awful lot. If you listened to all of our trades you could walk away wondering what the heck we were doing during certain trades if you focused on our results. Often my inner voice says to me Bella what the heck are you doing. This is a weird sport being wrong so much. It is against human nature to voluntarily live in a world of so much personal failure. Frankly there are periods of self-doubt that very few long term traders ever admit. How can there not be since our feedback is worse than a nagging wife for so much of what we do.

I have blogged and written in published text about this trading set up in the past (See The StockTwits Edge). Stock In Play. Breaks a range after doing significant volume intraday. Room to run after the break on our technical charts. This is a Trade2Hold in which we do not sell unless there is a Reason2Sell. Buy PLCM at 15, after it clearly breaks above the top of the intraday range of 85c, stops below 17.75 and hold until there is a Reason2Sell. Certainly scale out along the way but hold a core until the uptrend is broken (below 16.50?).

So I shared with that mentee how often I have been wrong the past two trading sessions. After the close yesterday I spent all of my time replaying that ABT trade. After the close today I will ask GMan, who also caught PLCM, to talk to our desk about this trading opportunity. There will not be a long GMan talk about some stock unclear and saturated in all things shakeouts. There will not be a lot of thought on my part thinking of the bad buy I made in LRCX. How could we have traded PLCM better? How did we make money in it? How do we find more trades like it? How do we build from our strengths?

Bella
One Good Trade

disclosure: no relevant position

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SMB Capital – Day Trading Blog

Yesterday’s Options Tribe Meeting: Broken Wing Butterflies

SMB’s Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each week the community will meet online for the primary purpose of watching live presentations made by outstanding veteran options traders and experts in the world of options trading. This week, Greg Loehr presented his approach to trading Broken Wing Butterflies..

If you couldn’t make it to the live webinar,  here’s your chance to watch the recording.

To view the recording: Click Here

Make sure to look out for the invitation to next week’s Tribe meeting.  That invitation will appear on this blog shortly.

Seth Freudberg

Director, SMB Options Training Program

The SMB Options Training Program is a twelve month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg:   sfreudberg@smbcap.com.

SMB’s Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each week the community will meet online for the primary purpose of watching live presentations made by outstanding veteran options traders and experts in the world of options trading. This week, Charlie Ferguson presented his thoughts on the use of debit spreads within options spread strategies. Options trader Rick Berkowitz also joined Charlie on this panel.

If you couldn’t make it to the live webinar,  here’s your chance to watch the recording.

To view the recording: Click Here

Make sure to look out for the invitation to next week’s Tribe meeting.  That invitation will appear on this blog shortly.

Seth Freudberg

Director, SMB Options Training Program

The SMB Options Training Program is a twelve month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg:   sfreudberg@smbcap.com.

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SMB Capital – Day Trading Blog

A little OWS, a little 99%, a little history

So today I read at the Yahoo Finance (it’s my home page because I can look at the stock numbers on the left and read the headline on the right for a guaranteed laugh) that  John Mauldin thinks the OWS would be better off if they occupiedCongress:
Mauldin believes America still has time to figure out a path out of what he says is the big problem worldwide: “We’ve over committed public monies and we don’t have them.” While some what sympathetic to the protestors’ frustrations, Mauldin says their anger is misdirected.
“My message to the ‘Occupy Wall Street’ guys: if they really want to If  they really want to go after the source of the problem, they should go occupy Congress,”
Instead of focusing on Wall Street,Washington and the protests should be focusing on reducing regulation and making it easier for new businesses to start, Mauldin says. To that end, he offers a new slogan I somehow doubt will showup at any Occupy Wall Street protest anytime soon: “Up with Entrepreneurs”
As I understand it, OWS is about economic equality. President Roosevelt referred to it as the economic royalty. I just don’t see how one can stop, look and listen to OWS and think “go tell congress to further deregulation”. John Boy can’t be this much of an idiot, can he?
My sweetheart gets home from the dentist. $ 4000 dollars worth of bridge work is down the drain because a tooth of the bridge went bad. 

For those who don’t know, we are the “Entrepreneurs” John Boy is referring to, thus we are paying for our health insurance, no dental. But, she was offered a payment plan. Has a nice dental name at 14.5% interest! This bit of private market solution to paying for health care is brought to you by GE Financial. Yes, the GE of Jeffrey Immelt, Obama’s job creating adviser. Hey Obama? Did you read my state of the union?  Obviously not or Jeffrey baby would not be your man.
Did you hear that JP Morgan was all blowed up? Yes, I’m not lying. People got pissed at Wall Street and blew up JP:
“During this period anarchists and socialists held protests on Wall Street out of a similar sense of frustration and rage at the banking system. The movement culminated in what was known as the greatest act of terrorism on American soil: the 1920 bombing outside J.P. Morgan and Company
Thirty eight people were killed when the horse and wagon bomb went off at noon on Sept 16, 1920. The perpetrators, thought to be anarchists, were never caught, but their exploits and the aftermath were captured by photographers.”
Check out the pictures here. 
Why do we not hear about this history considering the present times? I know, stupid question. To ask it is to give purpose to OWS. Though one sector of this nation seems to remember a portions of this history or we would not be hearing the pejoratives being slung a the 99%’ers. You know Anarchists, socialists, communists out to destroy the American Way (A catchy phrase brought to you by the National Association of Manufacturers via General Food’s CEO, the US Chamber of Commerce and AT & T’s monopoly is good all via Madison Ave, Time Magazine 9/28/1936) .
Which brings me to my original question since the shit hit the fan: HOW MANY TIMES DO WE HAVE TO DO THIS? HOW MANY FREAKIN’ TIMES DO WE HAVE TO LEARN THE LESSON?
Obviously from the above 3 subtopics, quite a few more times as we seem to have not learned the definition of Rat Race yet: A rat race is a term used for an endless, self-defeating or pointless pursuit…
I think I know what is wrong with US today. When I typed in Deja Vu at youtube,  amazingly this tune did not even come up in the suggestion list. 

No, I had to actually know that CSNY wrote what I consider the true musical capture of the concept of deja vu…the song that is most appropriate for the application of the concept today. I say this because they intentionally wrote the song so that it does not repeat any one section (heard years ago in an interview).

Get it?
(I haven’t forgotten the tax tables. It’s a coming.)


Angry Bear