It’s Now or Never For Bulls

Was today’s (Friday’s) world-market rally serious and sustainable, or simply a knee-jerk reaction to Japan’s surprise NIRP (negative interest rate policy) announcement last night (including some shorter-term short-covering action) and “end-of-month window dressing” by fund managers? Perhaps the following update to my last post will provide some further insight into that question, as I review […]
Slope of Hope

Top Trade Ideas for the Week of February 1, 2016: The Rest

Written By: DragonFly Capital

Here are the Rest of the Top 10:

ASML, Ticker: $ ASML
asml

ASML, $ ASML, fell hard out of a consolidation zone at the end of the year. It made a bottom in the middle of January and then bounced. that was followed by a short consolidation and then a bullish Marubozu candle Friday to resistance. The RSI is moving into the bullish zone and the MACD is rising and bullish. Look for follow through Monday to participate.

BP, Ticker: $ BP
bp

BP, $ BP, staged a rally in October that fizzled out before the 200 day SMA. It then pulled back and bottomed again, at a lower low in January before the latest leg higher. Friday it ended at resistance again, but with a rising RSI and MACD. Look for follow through Monday to participate.

Fifth Third Bancorp, Ticker: $ FITB
fitb

Fifth Third Bancorp, $ FITB, flirted around 21, an important level for a long time, all of 2015. Some times a bit below and sometimes a bit above. But that changed when the calendar turned to 2016 and the stock started a nosedive, losing 25% in 3 weeks. That resulted in an oversold condition on the RSI and MACD. Now it is consolidating as the RSI and MACD turn back up. Look for a move over the consolidation to participate for a move higher.

Goldman Sachs, Ticker: $ GS
gs

Goldman Sachs, $ GS, is a bottoming and reversal trade as well. This one has already stated higher and has a MACD that is crossed up with an RSI that is climbing near the mid line. The bullish candle Friday finishing near the high supports more upside. Look for follow through to participate.

Tractor Supply, Ticker: $ TSCO
tsco

Tractor Supply, $ TSCO, fell out of a rising trend in August with the market. From there it consolidated before a failed break to the upside and return under resistance. Now a possible double bottom has formed and the stock is back at resistance with a rising RSI and MACD. Look for a move higher to participate.

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After reviewing over 1,000 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 Friday which, after completing a horrible January at least saw it end on a good note in the equity markets.

On to February and look for Gold to continue higher in the short run while Crude Oil maintains a short run bias higher in the downtrend. The US Dollar Index continues to look ready to explode higher while US Treasuries may be ready to consolidate in the uptrend. The Shanghai Composite still looks like it is headed lower while Emerging Markets are biased to the upside in their downtrend.

Volatility is drifting lower towards normal levels relieving some of the pressure on the equity index ETF’s SPY, IWM and QQQ. Their charts all had great moves higher Friday and look to continue in the short term, while the weekly charts showed strong signals of reversals higher. The QQQ is the only short term chart that did not break resistance. Use this information as you prepare for the coming week and trad’em well.

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Fun analysis of the Donald Trump phenomenon

I haven’t followed Donald Trump too closely due to my dual theories that

1) an amateur cannot win a party’s nomination

2) a Republican cannot win a general election with a large turnout

This analysis of the Trump phenomenon by a Washington insider is interesting, however, even if Trump himself is not. Here are some excerpts:

Consider the conservative nonprofit establishment, which seems to employ most right-of-center adults in Washington. Over the past 40 years, how much donated money have all those think tanks and foundations consumed? Billions, certainly. (Someone better at math and less prone to melancholy should probably figure out the precise number.) Has America become more conservative over that same period? Come on. Most of that cash went to self-perpetuation: Salaries, bonuses, retirement funds, medical, dental, lunches, car services, leases on high-end office space, retreats in Mexico, more fundraising. Unless you were the direct beneficiary of any of that, you’d have to consider it wasted.

Pretty embarrassing. And yet they’re not embarrassed. Many of those same overpaid, underperforming tax-exempt sinecure-holders are now demanding that Trump be stopped. Why? Because, as his critics have noted in a rising chorus of hysteria, Trump represents “an existential threat to conservatism.”

Let that sink in. Conservative voters are being scolded for supporting a candidate they consider conservative because it would be bad for conservatism? And by the way, the people doing the scolding? They’re the ones who’ve been advocating for open borders, and nation-building in countries whose populations hate us, and trade deals that eliminated jobs while enriching their donors, all while implicitly mocking the base for its worries about abortion and gay marriage and the pace of demographic change. Now they’re telling their voters to shut up and obey, and if they don’t, they’re liberal.

If you live in an affluent ZIP code, it’s hard to see a downside to mass low-wage immigration. Your kids don’t go to public school. You don’t take the bus or use the emergency room for health care. No immigrant is competing for your job. (The day Hondurans start getting hired as green energy lobbyists is the day my neighbors become nativists.) Plus, you get cheap servants, and get to feel welcoming and virtuous while paying them less per hour than your kids make at a summer job on Nantucket. It’s all good.

Separately from this fun piece of writing… I think that Trump’s relative popularity can be attributed to the fact that the professional politicians in the Republican race are so numerous. Thus the multiple professionals, who are barely distinguishable to the average voter, each get only a fraction of the people who want to vote for a professional politician while Trump gets 100 percent of the voters who prefer an amateur.

[Separately, let’s not forget that if that Nantucket job results in a pregnancy with a high-income visitor, there could be 23 years of lucrative payments under Massachusetts family law and/or a $ 250,000 to $ 500,000 abortion sale.]

Philip Greenspun’s Weblog

The liberal and the beggar in the Whole Foods parking lot

A friend’s Facebook status:

This is what inequality looks like: Yesterday I’m accosted in the Whole Foods parking lot by a woman asking me for a dollar to buy a sandwich. I grumpily refused. A poignant moment for me, another rejection out of too many to count for her. What a world [frowny emoticon] [link to Atlantic article on rich bastards worldwide]

This guy is a software engineer married to a Harvard professor. His household income is approximately $ 300,000 per year. He tirelessly advocates on Facebook for higher taxes on the “wealthy” and for the election of Bernie Sanders. Yet he apparently refused to redistribute 1/300,000th of his household’s income to the beggar. In other words, he rejected a 0.00033… percent increase in his personal tax rate.

[You might reasonably ask why there are beggars in Cambridge, Massachusetts given that a non-working adult can get a free apartment, free food, free health care, etc. Certainly there are poor families receiving packages of assistance that work out to more than $ 100,000 per year after tax, e.g., starting with free occupancy of an apartment with a market value of $ 5,000 per month. However, a person who has not been favored by the various government poverty ministries and/or is bad at paperwork might find himself or herself with only free health care.]

I asked about the apparent logical contradiction between his political advocacy and his personal actions. He responded with “A $ 1.00 donation to a random bum in a parking lot is not equivalent to a tax increase.” His friend who is also a passionate Bernie Sanders supporter added “I have been trained to wonder if panhandlers use monetary donations to prolong unhealthy dependence of substances” to explain why he won’t give money voluntarily.

I then asked “Why couldn’t a welfare recipient just as easily use the taxpayer cash to ‘prolong unhealthy dependence of substances’? If you give me a free apartment, free food, and free health care, what stops me from spending the day doing whatever I want, e.g., smoking crack?” Neither he nor his fellow Bernie Sanders supporter had an answer for that. Instead they talked about wanting to “give people a guaranteed minimum income.” I responded with “Why not start with the woman at Whole Foods then? Her current guaranteed minimum income is $ 0 (though she may be able to receive an array of goods and services, such as food, housing, and medical care). If you gave her $ 1 then her guaranteed minimum income would be $ 1.”

Philip Greenspun’s Weblog

Fickle February (3 of 4)

Preface to All Weekend Chart Posts: Greetings from Slope Chart Central, where I have composed 38 of my favorite short positions in the form of charts. It’s the usual drill (Slope Plus gets exclusive access to a little more than half the charts; all Slopers get the remainder), except that I’ve decided to present these in static […]
Slope of Hope

Fickle February (1 of 4)

Preface to All Weekend Chart Posts: Greetings from Slope Chart Central, where I have composed 38 of my favorite short positions in the form of charts. It’s the usual drill (Slope Plus gets exclusive access to a little more than half the charts; all Slopers get the remainder), except that I’ve decided to present these in static […]
Slope of Hope

Who else loved the movie Footnote?

Footnote (2012) seems like an ideal movie for people involved with academia and/or parents whose children are in similar fields of endeavor. Who else loved it?

One thing that I enjoyed about the movie is that there are some loose ends. We never figure out the significance of the extra woman. We never learn what the bigshot professor knows about the father.

[Yes, it seems that I am at least four years behind the cool kids.]

Philip Greenspun’s Weblog

Where can one move to escape the Zika virus?

For about the third time during my 52 years, human life on Planet Earth is coming to an end. First it was nuclear war, then it was AIDS, now it is the Zika virus.

Perhaps a vaccine will be found one day, unless it turns out that this virus, like most others, is smarter than humans. Killing all of the world’s mosquitoes with a massive one-time dose of DDT would be great, except the mosquitoes also turned out to be smarter than humans (see this paper on genetic resistance to DDT).

Here’s a question for readers: Are there long-term effects from this virus? (New York Times says “no” but the paper has been known to be wrong…)

Given that the virus is spread by mosquitoes, where could a person go to escape the virus? Hawaii would have been ideal, except that Europeans began trashing the place in 1826 with this pest. (Pregnant women should watch out, though, because child support is quasi-capped at $ 72,000 per year.)

Can the virus survive if the mosquito population is dormant for most of the year? If not, that would make mostly tax-free Alaska a potential choice, except that one human visitor from the Lower 48 in May could reinfect the state? (Pregnant woman: watch out that you don’t end up like Bristol Palin as an actual target of a child support lawsuit under Alaska’s gender-neutral laws.)

How about a desert? There were no mosquitoes at Burning Man! Unfortunately, it seems that there are some in income tax-free Las Vegas (source). (Pregnant women: Nevada has the least lucrative child support system in the United States. Though more profitable than in Europe, the cash value of a child in Nevada might be 1/10th or even 1/100th of the potential revenue in Massachusetts or California.) Arizona and New Mexico have plenty of areas that seem too dry for mosquitoes, but pregnant women would need to be aware that they could become child support lawsuit targets in Arizona due to the 50/50 shared parenting default.

What about staying cold all year? Spend the winter in Alaska or in Jackson, Wyoming (neither state has an income tax). Spend the Northern Hemisphere summer in southern Chile or Argentina?

Go somewhere is a true desert? Take a job working on a telescope in the Atacama Desert? Or head to the South Pole?

Can we invest on this trend? Even if Las Vegas is not completely mosquito-free, could this be what finally gives a lift to Vegas real estate? Can we short Brazilian Olympics tickets?

Philip Greenspun’s Weblog