The Dollar/Euro Conundrum

Since my last post regarding the USD and oil relationship here  I have been watching the USD with great interest.  Problem is, I see the same pattern in two different time frames and they seem to conflict with eachother.  I’ve added the Euro as a comparison.

USD Euro conundrum
Which direction will win out?  For now, the channels are intact and the longer-term lines should be expected to hold until they don’t.  Together with the re-emerging bond market issues in Europe, I expect the USD to break out and the Euro to break down, but as always, we’ll see.  The Euro suggests that a break is imminent while the dollar looks like it could go another month before it has to break.  Until they do, I imagine the equities markets will be choppy and a tad difficult to read.  If you’re an intermediate or longer term trader, it might be safer for capital to just sit tight until these markets show their hand.

Slope Of Hope with Tim Knight


Written By: DragonFly Capital

All you need right? An excuse to buy more beer. These three beer company stock charts are primed for a bender. Have a cold one ready and ride the moves higher.

Companhia deBeibedis das Americas, $ ABV

Companhia deBeibedis das Americas, $ ABV, or AmBev, made a double top to end last week and is now looking better to the upside after a minor flirtation lower. The Relative Strength Index (RSI) held and is moving higher in bullish territory and the Moving Average Convergence Divergence (MACD) indicator is positive, both supporting more upside. Look for a move over 44.50 as your entry.

Anheuser-Busch InBev, $ BUD

Anheuser-Busch InBev, $ BUD, made that same double top and is moving higher after a bit of a deeper pull back. It also has an RSI that is bullish but with a MACD that is negative, yet improving. A move over 72.70 triggers a long entry on this name.

Craft Brewers Alliance, $ BREW

Compared to those giants, Craft Brewers Alliance, $ BREW, barely trades. But this gem is also ready to break out higher. A move over 7.80 is your trigger. Be ready for some big swings as this can be volatile with the low volume.

Dragonfly Capital

Brookline Bancorp Executive Compensation for 2012

My stockholder’s proxy package arrived in the mail today for Brookline Bancorp (BRKL), one of my few individual stock holdings. The first page of the annual report has a smiling CEO, Paul Perrault, proudly reporting that for 2011 net income was up by 3 percent over 2010 (to a total of $ 27.6 million). Why was the guy smiling so broadly after turning in such a lackluster performance? Buried in the proxy materials was the fact that his own salary grew by 48 percent over 2010 (to a total of $ 1.56 million). I.e., if operating profits and CEO pay at BRKL keep growing as they have, the CEO’s compensation will exceed the total operating profit of the enterprise starting in 2019.

In theory the shareholders are supposed to vote on whether or not the Board of Directors have come up with a reasonable plan for 2012 executive compensation. However, the materials distributed with the proxy all relate to 2011 pay. We will have to wait until 2013 to find out exactly how much Mr. Perrault gets.

How good a job does the 60-year-old Mr. Perrault need to do in order to get paid? The standards turn out not to be that exacting. If the guy becomes disabled he gets at least a year of salary. “In the event of death, Mr. Perrault’s estate, legal representatives, or beneficiaries shall be paid his Base Salary for a period of one year form the date of his death.” So the shareholders of BRKL are unwittingly in the disability and life insurance business.

How are the shareholders doing? Going back 10 years in Google Finance shows that BRKL is down 19 percent. The Dow Jones went up 27 percent during the same period. The Nasdaq was up 71 percent.

Philip Greenspun’s Weblog

Guest post: Why Tax Cuts for the 1% Are Self-Defeating

Tim had written as a guest poster for Angry Bear as ‘reader T-bone’ a few years ago and is returning to writing, currently at Polymic.  This post was published about a month ago.

Guest post by Tim Martinez

Why Tax Cuts for the 1% Are Self-Defeating

Why Tax Cuts for the 1% Are Self-Defeating
Annual U.S. income share of the top 1%.

A new GOP budget released Tuesday brings renewed attention onto the issues of tax policy and the economy. Of course, there will be debate over what effects various policy options would have on the economy, something I have previously addressed in a previous article. But inevitably, there will also be arguments made by Republicans regarding the fairness of those policies as well.

The problem with many of the GOP arguments made in regard to fairness is that they lead to a self-defeating paradox in either the logic of the argument, or in the outcomes of their recommended policy solutions.
For example, one common argument made is on the grounds that it is unfair for the wealthiest to pay higher taxes since they are already paying the most federal income tax while many people pay none at all. But this argument is flawed in multiple ways.

First of all, the logic of this argument is paradoxical. As the wealthy get wealthier while others fall behind in comparison, the share of tax burden on the wealthy would continually increase. In other words, this logic would suggest that the closer the wealthiest come to earning 100% of total income, the more unfairly they are being treated since their share of income taxes edges closer to 100% as well. And by contrast, it would be considered more fair for the wealthy if their incomes fall while others’ incomes rise, since taxes paid would be more equal.

Second, the big irony here is that the policies that would seem to make it more fair for the wealthy in the short-term (lowering their tax rates at the expense of other policy options) are policies that would tend to further increase income disparity in the long-term. This is due to these policies’ lower effect on creating demand (lower economic multiplier), which means less need for labor (a weaker labor market).
Let me explain. The wages that average working people can expect depends on the overall demand for labor. If unemployment is very low, businesses must compete harder for labor. People will find more opportunities available, more competing offers, and find it easier to change jobs. This pressures business to offer more competitive wages, among other things.

In other words, policies that facilitate strong demand and thus strong employment lead to higher incomes for labor, which narrows income disparity. This real income growth due to strong employment is something we can see happening in China, for example.

In addition, this type of stronger income growth will itself fuel stronger demand. We typical refer to this as a strong middle class. The stronger demand it generates in the economy supplants the need for demand-creating policies, which means those polices can be slowly rolled back. This can even happen automatically to an extent, as a larger, wealthier middle class pays more taxes, and that increased revenue can be used even for a tax cut for the wealthiest.

Achieving an ideal conservative vision of the economy and of government tax policy by enacting conservative-favored policies is a self-defeating paradox. Ironically, the path to this ideal conservative outcome can only be achieved by first enacting liberal policies

Angry Bear

Technical Picture – Uptrend Persists

After a pullback at the front end of March, the uptrend has exceeded the 23.% FE and continues with little hint of a correction any time soon. As long as we hold the HWB level of the current FE (green fibs), we should reach the next target 1420 very shortly.

The only caveat I see is that small caps are lagging as depicted below. A failed BO of the IWM would be a red flag for the broader markets.

Swing trades in play DVN, POT, GLD.

DVN broke out of a long consolidation pattern on high volume. I waited for a pullback to the bottom of the ambush zone. Price had a nice bounce off of the initial entry, but stalled and retested. Now, it is starting to move in the right direction towards a retest of the highs.

As we can see from the daily chart of POT above, it pulled back to the bottom of the ambush zone (50-62% Fib. retracement level) on Wednesday.

On the 15 minute chart below, we entered long on the first ambush retracement after Thursday’s gap up. We added to the position on Friday as it flagged after another gap higher. Partial profits taken into the close. Plan to add back on a pullback.

GLD sold off sharply following the last FOMC statement. It has corrected back to the ambush zone on the daily. I’m looking for a bounce half way back to the ambush zone of the counter trend trade (green fibs). After which I’ll be looking for a short.

The 15 min. chart below, shows the initial entry, stop below red line.

AAPL is extremely extended. It has breached it BB twice in this parabolic move higher. The first breach was met with a quick shallow retracement to the ambush zone, and we appear to be doing the same again on the second breach. A failure of the ambush, could see a deeper correction back to the rising 20 MA.

John Bollinger talks about the Three Pushes to a High pattern in this month’s issue of Stocks and Commodities magazine. This pattern suggests that the next time the BB are breached within this uptrend, AAPL will be ripe for a full HWB (half way back) from the October high to high.

N.B. Apple will disclose its plans for $ 100 billion cash reserves tomorrow at 9:00 AM EST. NQ futures have rallied to new highs this evening.

Wall St. Warrior

Common Cause Claims ALEC Violated Tax Exempt Lobbying Restrictions

by Linda Beale

 Common Cause Claims ALEC Violated Tax Exempt Lobbying Restrictions

 The Common Cause organization filed a complaint with the IRS under 26 USC 7623, the tax whistleblower act,  alleging that the American Legislative Exchange Council violated the lobbying restrictions applicable to tax exempt organizations through underreporting and operating in furtherance of private corporate interests.   The complaint argues that “ALEC’s primary purpose is to provide a vehicle for its corporate members to lobby state legislators and to deduct the costs of such efforts as charitable contributions. ALEC drafts “model” legislation provided by its corporate and legislative members, and lobbies for the adoption of that legislation. These goals are fundamentally inconsistent with ALEC’s claimed tax-exempt status as a charitable organization.”

The following paragraphs are from the introduction to the complaint.

This matter concerns the massive underreporting of lobbying by the American Legislative Exchange Council (“ALEC”). While ostensibly a nonprofit organization under Section 501(c)(3) of the Internal Revenue Code, ALEC’s primary purpose is to provide a vehicle for its corporate members to lobby state legislators and to deduct the costs of such efforts as charitable contributions. ALEC drafts “model” legislation provided by its corporate and legislative members, and lobbies for the adoption of that legislation. These goals are fundamentally inconsistent with ALEC’s claimed tax-exempt status as a charitable organization under 26 U.S.C. §501(c)(3), because (i) “no substantial part” of a charity’s activity can be “attempting to influence legislation,” and (ii) ALEC’s activities do not qualify under any of the enumerated purposes of Section 501(c)(3).

This scheme causes harm to taxpayers in two distinct ways. First, ALEC’s activities constitute an abuse of its 501(c)(3) tax exemption, which is reserved for organizations “operated exclusively ” for a limited number of purposes, such as “religious, charitable, scientific … or educational purposes ….” 26 U.S.C. §501(c)(3). Second, ALEC’s corporate members improperly deduct from their taxable income the dues and other contributions made to ALEC; such expenditures are non-deductible lobbying expenses under Section 162(e). In fact, because ALEC solicits very few contributions from individuals, its false claims of tax-exempt status appear driven by the desire of ALEC corporate members to deduct lobbying expenses as charitable contributions.
ALEC’s primary, if not sole objective is to “influence legislation.” Its bylaws state that its purpose is to “formulate legislative action programs,” “disseminate model legislation and promote the introduction of companion bills in Congress and state legislatures,” and “[e]establish a clearinghouse for bills at the state level, and provide for a bill exchange program.” 1 As recently as April 11, 2012, ALEC boasted that “for years, ALEC has partnered with legislators to research and develop better, more effective … legislation. 2Notwithstanding these claims, however, ALEC has reported ”for years“ to the IRS that it has not spent a single penny on lobbying or attempting to influence legislation. These tax returns are patently false.  (Complaint available here, on BNA’s tax service)

The complaint goes on to specify how ALEC develops legislation and works to get that model language enacted.  The following is an excerpt from this portion.

ALEC boasts about how frequently its bills are introduced in state legislatures to show its influence over the legislative process, publishing “scorecards” to demonstrate the high numbers of ALEC bills enacted. [Exhibit 9] In its 1995 scorecard, then-ALEC Executive Director Samuel A. Brunelli explicitly stated that corporations join ALEC to drive a legislative agenda in a cost effective way: “’This was a landmark legislative year in ALEC’s history,’ said ALEC Executive Director Samuel A. Brunelli. ’With our success rate at more than 20 percent, I would say that ALEC is a good investment. Nowhere else can you get a return that high.’” [Exhibit 11] Similarly, in a brochure that ALEC distributed to recruit more corporations for its private sector membership, it claimed that “during each legislative cycle, ALEC legislators introduce more than 1,000 pieces of legislation based on these models, approximately 17 percent of which are enacted. ” [Exhibit 12] It is telling that ALEC expresses its success in corporate terms, as a good “return” on a corporation’s “investment” in tax-exempt lobbying.
Beyond quantifying its influence by measuring how often its lobbying efforts succeed, ALEC trumpets how its Task Forces and other programs provide corporations with direct access to state legislators. In a near textbook definition of lobbying, the recruitment brochure states “ALEC provides the private sector with an unparalleled opportunity to have its voice heard, and its perspective appreciated, by the legislative members.” !d. The brochure further explains that “[t]his partnership identifies issues and then responds with common-sense, result- oriented policies. The two groups work in unison to solve the challenges facing the nation, with results that will define the American political landscape in the 21st century.” Jd. In other words, ALEC provides a network to influence the legislative process and deliver “results” to its private 13 corporate membership – namely, legislation favorable to corporate members’ interests. These statements by ALEC belie any claim that it is engaged in “education” rather than lobbying . The ALEC Task Forces provide a venue for corporations to lobby legislators while deducting the expenses as charitable donations.

The complaint goes on to outline the way ALEC presses for legislation, including issue alerts and one-on-one contacts with key legislators, bill tracking documents, model press releases and talking points to assist legislators in getting its model legislation passed,  hearing testimony by staffers in support of the ALEC legislation, and even  luxury conferences three times annually to which legislators are encouraged to bring families for subsidized work/vacations.

Legislator members on ALEC Task Forces are also eligible for “ALEC scholarships,” which reimburse a legislator’s accommodation, transportation and other expenses to attend the ALEC national conferences. Scholarships are also available for legislators to attend other events, including “ALEC Academies,” which are described as a “two-day intensive program on a specific issue;’ attended by invited members of both the public and private sector. Contributions to the ALEC scholarship fund are made by corporations who are solicited directly by legislators at the individual state level. See Exhibit 18 (a breakdown of payments to the ALEC in Ohio scholarship fund). According to the tax filings of PhRMA, the pharmaceutical lobbying group and ALEC private sector member, it provided $ 356,075 to the ALEC scholarship fund in 2010. 13Many of these expenses are likely deducted from corporate taxable income. The ALEC conferences are nothing more than a forum for tax-subsidized lobbying. ALEC provides logistical support in the form of travel, accommodations, entertainment, and family services, in order to facilitate lobbying by ALEC’s corporate members targeting ALEC’s legislative members.

The complaint considers whether ALEC even qualifies as a 501(c)(3) organization.  Suggesting that the only possible qualifying purpose that might be claimed is educational, the complaint concludes that ALEC clearly fails to satisfy any concept of an educational non-profit.

[E]ven if a tortured interpretation of the regulations led to the conclusion that ALEC is not engaged in lobbying, ALEC would fail to satisfy the most basic requirement for 501(c)(3) status – operations that are exclusively for charitable purposes . ALEC’s operations are neither charitable nor educational, much less exclusively so. They are pecuniary and political, and devoted to fostering the enactment of bills that will financially benefit and further the ideological goals of ALEC’s corporate membership.

crossposted with

Angry Bear

It’s Make or Break with Support Divergences in Silver and Gold April 22

Let’s update a key situation we’re following in the commodity markets of Gold and Silver.

Both markets are showing similar “bullish divergences at support” which gives us a key level to watch for any reversal… or breakdown/failure… in the weeks ahead.

Let’s start with Gold to note the key trigger and target levels along with the divergences:

Our April 13th update on the “Triple Timeframe Key Levels for Gold” pinpointed the current $ 1,640 level as critical to the market.

Though we saw a sharp bounce from $ 1,620 to $ 1,680 after that update, price has returned to challenge the $ 1,640 level which will be critical going forward.

I’m showing a color-coded “structure” chart to highlight the key declining trendline which currently intersects the 50% downside Fibonacci Retracement at $ 1,664.

Traders could look to a price breakthrough above this level as a potential bullish trigger for a continuation move expected into $ 1,700 for a minimum/small upper target.

That’s the bullish suggestion from the repeated ‘bounces’ off support and the persistent positive momentum divergences… but an upside outcome is by no means guaranteed.

Instead, should price break under $ 1,630 then continue trading to the $ 1,600 level, look for a round of liquidation and bearish-positioning particularly on a breakdown under the $ 1,600 ’round number’ confluence level.

While odds tilt towards the bulls above $ 1,640, each lower price support level that breaks serves to tip the scale more to the bearish side until odds would favor a breakdown under $ 1,600.

The structural picture is very similar in Silver (support divergences):

Silver experienced a more prominent ’spike’ higher at the end of February that took out the November 2011 price high – unlike gold.

From there, price has retraced in an intraday downtrend fashion all the way back to the $ 31 level which is just above the 61.8% Fibonacci Retracement and “price polarity” level at $ 31.60 from prior support and resistance (mini-reversals).

That being said, we’ll be watching silver relative to the horizontal green support bar I drew just under $ 31.

For reference, silver becomes a potential breakout buy candidate above the falling trendline at the $ 32.00 per ounce level.

Above $ 32 suggests a continuation move back to the $ 33 level and beyond that on a trigger break above $ 33’s resistance (Fibonacci and Price Polarity).

Feel free to take a look at a recent lesson I wrote about “timeframe trend identification” using Silver as the example market.

For these related markets, keep focused on the defined horizontal support levels along with the falling trendline for potential trading triggers on any breakout.

Corey Rosenbloom, CMT
Afraid to

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

Afraid to Blog

Why Not Pawn Your iPad

Written By: DragonFly Capital

I am so excited! Apple is flying higher in after hours trading and we only have to wait 3 more months before they report again. The banter will be phenomenal! I bet we see a $ 1200 price target before Friday now. Congratulations to all of you who made money on the stock. But maybe, just a small thought, while you are waiting for the next big iPhone launch or Apple TV or the long awaited iCar/iHelicopter you might want to take your old iPad to the pawnshop and get some extra cash for a trade. Have you looked at the pawnshops, I mean payday lenders, lately? They seem to be bottoming.

Cash America International, $ CSH

Cash America International, $ CSH, has had a hard fall lower over the past month but is finding support at the 41.50 level, printing back to back doji candles. As it sits there the Relative Strength Index (RSI) is rolling back higher after touching in oversold territory. Keep a watch on it and enter long on a close over 42.50.

First Cash Financial Services, $ FCFS

First Cash Financial Services, $ FCFS is also printing back to back doji, the indecision candle. This chart shows that it is consolidating back into the Bollinger bands as the RSI is touching the technically oversold level. A move back over 40.25 is your entry. Don’t cheat.


EZCORP, $ EZPW, is the best looking of the bunch, having already put in one good up day Tuesday. The RSI is turning higher after bottoming at 22 and volume is picking up. This one should be at the top of the list. A move over 27 is a safe entry long against the recent support near 26.

Dragonfly Capital

They Also Serve Who Only Stand and Graph: A Graphical Response to Paul Krugman on the Effect QE1 and QE2

by Mike Kimel

They Also Serve Who Only Stand and Graph: A Graphical Response to Paul Krugman on the Effect QE1 and QE2

I’ve taken a lot of flak for critiquing two posts by Paul Krugman in two posts of my own (the second one is here).

To summarize the point where people keep telling me I’m wrong, it has to do with quotes from Prof. Krugman’s pieces, and whether or not I’m misinterpreting those quotes. So I’m going to try this again… I’m going to put up the quotes and tell you how I’ve been told I should be interpreting those quotes. Then I’m going to put up a graph.

Before I get started, I want to be clear: Prof. Krugman is often the only voice of reason, particularly on issues like austerity and taxes, among those allowed up onto the platform to speak. What follows is not a polemic against Prof. Krugman. All of us are wrong sometimes. But I’m focusing on this issue precisely because it seems to be one of the factors leading one of the few voices of reason out there astray on an important issue.

Anyway, enough with the editorial comment. First, a quote from Prof. Krugman’s first post.

Furthermore, Fed efforts to do this probably tend on average to hurt, not help, bankers. Banks are largely in the business of borrowing short and lending long; anything that compresses the spread between short rates and long rates is likely to be bad for their profits. And the things the Fed is trying to do are in fact largely about compressing that spread, either by persuading investors that it will keep short rates at zero for a longer time or by going out and buying long-term assets. These are actions you would expect to make bankers angry, not happy — and that’s what has actually happened.

Now, from Prof. Krugman’s second post in which he responds directly to me


Ordinary monetary policy involves cutting short-term rates to fight a slump; it’s not what we’re talking about here, since it’s hard up against the zero lower bound. But the large-scale conventional expansion the Fed engaged in by getting to the zero bound has, of course, widened the spread between short and long term rates, since markets expect short rates to rise above zero eventually. So looking at the raw data on the short-long spread tells you nothing.

The bolding, in both cases, is mine.

Now, I’ve had people writing to tell me I’ve interpreted these two paragraphs the wrong way. The way to interpret them, I’m told (and now that it has been pointed out, I can see the logic) is this:

1. The Fed engaged in conventional expansion at the beginning of the financial meltdown, and that widened the spread between the short term rate at which the banks borrow and the long term rates at which the banks lend.

2. During the nonconventional expansions (i.e., QE1 and QE2), the spread narrowed).

3. Banks prefer wider spreads, and thus, we have evidence that banks are actually unhappy with the things the Fed is (or was) trying to do.

Point number 1 is partly consistent with the graph shown in my first post on the topic, or at least kind of. The graph shows the spread between the FF rate and the 30 year mortgage rate. (i.e., the spread between the shortest rate at which banks borrow and the longest rate at which they regularly lend.) As the graph shows, the spreads widened… but best I can tell, they hit a local bottom in December of 2006. That big process of widening of spreads began in early December 2006.

If you think of monetary policy in terms of interest rates, which most people (and not to speak for Prof. Krugman, but based on reading his posts on a daily basis for many years, it is evident he does), there is nothing magical about early December 2006. The Fed Funds rate was about 6.11% at the time. It rose (not quite continuously) through mid June of 2007, but remained above 6.11%. But from early Dec 2006 to mid June of 2007, the spread increased from 0.86 to 1.48, a jump of 72%. Yes, as interest rates tightened, the spread continued rising, but the whole big rise got jumpstarted not with conventional monetary expansion, but rather with conventional monetary tightening, and this happened before anyone was thinking slump.  

Here’s a second graph. It shows the FF rate, the spread between the FF and the 30 year mortgage rate, QE1 and QE2. The QEx periods are represented by the Gray bars. I’ve also labeled the non-QEx periods as C1, C2 and C3 for “conventional 1,” “conventional 2,” and “conventional 3” – not that any of what we’ve seen in this time has been conventional.

As I noted already, the C1 period is not entirely consistent with how I’ve been told I should be interpreting Prof. Krugman’s quotes, though it isn’t inconsistent with the quotes either. Call it a wash.

What about QE1? Well, the spread peaked the weak of Nov 6 2008 (spread of 5.96), and QE1 began on Nov 26 (spread of 5.41). During QE1, the spread got as low as 4.59 in Dec 2009, and then widened out. The spread was at 4.92 at the end of March 2010 when QE1 ended.

I don’t know what to make of this. Was QE1 telegraphed? It sure doesn’t look like it if you at the FF, but I don’t know enough about that market. I will only say that from where I’m standing, it sure likes the compression Prof. Krugman was talking about is due to something other than QE1. I say this because the narrowing of the spread was actually about the same (actually, a smidge greater) over a three week period leading up to the start of QE1 as it was from the beginning of QE1 to the end of QE1. Worse, it seems that the last four months of QE1 show a widening, not a compression of the spread.

Where the story begins coming apart completely, though, comes in period C2. Somehow the spread begins to narrow precisely, and I do mean precisely, at the point where QE1 ends. From March 31, 2010, to November, 2010, we see a narrowing of the spread that looks more like a straight line than anything else in the graph.

And then…. the spreads begin to widen again beginning in early November 2010. But QE2 began November 3, 2010, and, according to what people tell me, QE2 should have led to a narrowing of the spread, not the end of the narrowing of the spread.

In sum, the evidence is neutral when it comes to what Prof. Krugman believes happened to the spread during QE1, and it contradicts his views on QE2. None of this is to knock anyone, not Prof. Krugman, nor any of the folks who wrote me. We’re living in unconventional times, and the old rules don’t apply. I would merely suggest that in the light of this information, people re-evaluate whether unconventional monetary policy really is hurting the banks. As I suggested in my previous two posts, I believe the evidence shows quite the opposite.


(As always, if anyone wants my spreadsheet, just drop me a line. I’m at my first name (mike), my last name (kimel with one m), at gmail.)

Angry Bear

Market Recap – Weakness Continues But Apple Jumps After Earnings Beat

Today was a mixed session. While growth stocks took a hit across the board, dragging the NASDAQ to another close in the red (-0.3%), the financials focused S&P 500 closed higher (+0.4%).

On the earnings front, Baidu (BIDU) is tanking after hours thanks to an earnings miss while Apple (AAPL) is up trading back near $ 600 thanks to another stellar quarter. The key to success was growing demand for the iPhone overseas. A look at the after-hours session,

This has single handedly caused market futures to rise heading into tomorrow which should make things interesting. Stay frosty out there and I will see you back here tomorrow.

Original post: Market Recap – Weakness Continues But Apple Jumps After Earnings Beat

Stock Trading To Go

Market Recap – Support Falls and Apple Preps For Earnings

The accruing distribution days from the past month have once again confirmed trimming exposure and overall sitting in cash until the market can regain its footing has been the right play. Today both the NASDAQ and the S&P 500 gapped at the open and never recovered. The S&P 500 broke its long term trendline, and the NASDAQ made lower lows. Both indices are below their 50 MAs.

As far as an explanation, it seems today’s sell off was largely in response to Europe’s bearish market outlook. ZeroHedge notes, “…broad European equity markets made nearly their largest drop in five months. With the BE500 (Europe’s S&P 500 equivalent) at three-month lows and Spain’s IBEX within a few points of the March 2009 lows…”

On the earnings front, Netflix (NFLX) posted after the bell and failed to impress with Q2 guidance even though it met expectations. The stock is currently trading at $ 84.70 in post hours trading after closing at $ 101.84.

The earnings event everyone is waiting for will arrive tomorrow as Apple (AAPL) posts after the bell. The stock has had a rough time the last few weeks (Bespoke, since peaking at $ 644. The stock closed back at its 50 MA support but looks weak here overall. We should expect a decently sized gap one way or another tomorrow after the close which will effect the market on Wednesday.

Stay frosty out there.

And here is an interesting look at a possible head and shoulder formation on the S&P 500 from Dan Zanger’s Sunday newsletter. If the pattern holds true we are in for some large declines over the coming months.

Click to enlarge

Original post: Market Recap – Support Falls and Apple Preps For Earnings

Stock Trading To Go

Why are 30? LCD monitors still so expensive?


Five and a half years ago, I wrote a posting marveling that the Dell 30″ LCD monitor was selling for $ 1279. My HP-brand 30″ monitor seems to be flaking out, so I was considering replacing it with another Dell (my six year-old Dell monitor is still going strong). What’s the latest price from Dell? $ 1299! With LCD TV prices on a constant downward trend, how is it possible that the 30″ computer monitor remains stuck at over $ 1000? It is just that nobody wants this size? sells 27″ name-brand monitors (e.g., Samsung) for $ 300, but it would be hard to give up the extra size and resolution to which I have become accustomed.  I love being able to type a report in one window and review a source document (typically in PDF format) in another window. The 30″ monitor is ideal for that.

Maybe the right solution is to mount two 1080p 27″ monitors side-by-side vertically? I wonder if an average graphics card will drive that.

Philip Greenspun’s Weblog