Drew Arnold

Don't be fooled by the sudden recovery, Paul Farrell says - American capitalism has lost its soul and the consequences will be dire: "Use your gut. You know something's very wrong: A year ago 'too-greedy-to-fail' banks were insolvent ... Now, magically they're back to business as usual, arrogant, pocketing outrageous bonuses while Main Street sacrifices, and unemployment and foreclosures continue rising ... "

It'd be tough to argue, however, that the banks are making money off of "Main Street". Loan losses are still way up and the banks are making most of their money from fixed income and M&A.

Don't Try to Pick a Top in this Market

It's always nice to see some technical analysis on SeekingAlpha, Suzanne, thanks. I agree that it'd be ridiculous to try to call a top in this market as so many bright people have been doing. Even if the fundamental reasons aren't there, other factors like asset allocation and put protection are proving to be very strong and are taking the market higher.

Will China Become the World's Leading Exporter?

They fell of a smaller cliff than German exports.


On Aug 28 09:03 AM Alphameister wrote:

> Are these the same Chinese exports that have "fallen off a cliff"?

It's All in the Timing

It is interesting how such a bright investment community like Seeking Alpha has generally been so wrong on this rally, and how the "cheerleaders" over at CNBC have been so right. All the more reason to pay attention to the technicals. Good article, Suzanne.


On Aug 20 02:49 PM David Van Knapp wrote:

> Suzanne,
>
> I just ran across this post, and it is great. I agree with all of
> it.
>
> In my book, "Sensible Stock Investing," I discuss investing approaches
> that have few processes in common with what you seem to do. They
> are more long-term oriented rather than pitched to trading. But many
> of the timing principles seem the same. I devoted a chapter to timing,
> for the purpose of presenting a tool that helps (i.e., improves the
> odds of) an investors' stock purchases getting off to good starts.
> Those odds increase if one chooses a good time to invest in the stock
> of choice.
>
> Your list of points is so similar to mine:
> --Everyone times whether they admit/recognize it or not.
> --Have a predetermined strategy to exit the position if it turns
> against you.
> --Use some sort of indicator or signal to evaluate whether "now is
> a good time" or not.
> --Avoiding large losses is more important than hitting home runs
> in the long term...and timing can help you do that.
>
> I took a shot (several, actually) at MPT and EMH too. Felt good.
>
>
> I don't think it would be helpful for the shorter-term periods that
> you appear to work with, but I developed a simple Timing Outlook,
> based on 10 indicators, that I use. It's described on my blog, if
> you care to look at it. If you do, I'd love to receive any feedback
> you might have. I suspect it would look primitive to you, but it's
> got a good success rate for its mission, which is to help people
> get new stock purchases off to good starts. It also reinforced my
> resolve to get involved in the current rally despite a firestorm
> of criticism from the negative commenters on Seeking Alpha. Turns
> out I was right. When the rally ends, of course, I have my predetermined
> exit point already established.

A few weeks ago, China's stock market was the world's best performer. Now a sell-off has it just third-best among the BRIC nations, with Russia up 57% and India up 54%.

What about it?


On Aug 20 03:03 PM Avooch wrote:

> Solow Growth Model

Stalking a Semiconductor Short

Looks great as a short until that S&P gap is filled. Out of curiosity, and maybe this was on one of your other posts and I missed it, will you be buying up some long positions on this pullback or shorting it all the way? I'm subscribing to a mixture of the two, but I was curious as to what you thought.

What is India up to?

Great looking chart, it'll be interesting to see to see if it falls back to that gap from the elections. It'd be surprising given the growth numbers that India will probably be touting. It would likely take an especially strong pullback from the rest of the world (which might be happening now) to cause that. Even with that, given how India's economy is less dependent on exports than most, India might actually be a destination for money rotating out of the United States, which will lack growth, and China, which may or may not be in an equity bubble. We'll see...

Chinese Stocks Break Below 50-DMA

CAF has been a good way to play the pullback, but is also strange in the sense that it didn't really participate in the rally on the way up. I understand that FXI is made up of H-shares, but it still might be a good way to play the pullback since Chinese banking troubles are part of the fundamental story behind the weakness and FXI has so much exposure to financials. Even still, if somebody more knowledgeable that I am on CAF could explain why it didn't really participate in the rally then that'd be appreciated.


On Aug 15 05:51 PM Alan Young wrote:

> Mr. Harper is correct. The fact that the A-shares were extremely
> overbought, and corrected by 12%, hardly makes a dent on the H-share
> market, where traders are generally more sophisticated. The idea
> that a correction in the isolated local market would force the entire
> world to change course is quite far-fetched. Regardless of stock-buying
> excesses and corrections, China remains the leading economy in the
> worldwide recovery.
>
> Still, to be prudent, I would hedge a bit of my H-share holdings
> with FXP.

Chinese Stocks Break Below 50-DMA

Shorting FXI would seemingly be a good way to do it in this case since FXI is well overweight Chinese financials, and questionable loans by Chinese banks as well as the possibility the government further clamping down on loan activity are supposedly part of the reason that China is seeing a pullback. However, the charts above show that the financials have pull back very little compared to the other sectors. I'm not sure as to why that's happened, maybe somebody could explain this? Also, next week will likely be a volatile one for the banks given that they'll be reporting earnings, so tight stops would be helpful.


On Aug 15 11:29 AM Macro_Man wrote:

> How do you short China. Is FXP a good short or is there a better
> way?

Is the VIX Really Being Gamed?

Some of that rise can be attributed to call buying, which is why the VIX has gone up on a bullish tape.


On Jul 31 07:09 PM Baboon wrote:

> Both SPX and VIX rose this week. Can anyone offer an explanation
> of this fact?

News Corp. (NWSA): Chairman Rupert Murdoch says there are no clear signs of a fast recovery, and that News Corp. intends to charge for all news Web sites. "Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting."

I don't personally like the business model. Charging for Fox News online content under the claim that it's "quality journalism" isn't the same as charging for the WSJ... two very different things. While I'm sure that there's some unique content on the Fox News site, I'd suggest that the vast majority of that information can be obtained through the AP or Breitbart, both of which are obviously free. WSJ caters to a unique customer.

Personal Income Drops Again - How Will Consumers Spend Now?

Consumers are still "trading down" on their purchases. We've heard this from grocery stores like Safeway and brewers like Molson Coors. That trade will clearly continue.

Fast Food Restaurants Have Right Menu for Recession

"A recent analysis by restaurant industry consultant John Gordon showed a mixed picture for fast food restaurants, with McDonald’s, Chipotle (CMG) and Steak N Shake (SNS) faring better than Yum Brands (YUM) and than Darden’s (DRI) Red Lobster and Olive Garden."

Today Morgan Stanley downgraded MCD, saying the YUM was in better position for a recovery. MCD proceeded to breakdown below a key support level at today's close. The analysis on this sector sure is a mixed bag!

Madoff trustee Irving Picard sues Ruth Madoff for at least $44.8M because she lived a "life of splendor" using proceeds from her husband's fraud. Madoff's lawyer calls the suit "perplexing and totally unjustified" since Ruth already forfeited "almost all" the assets named in the complaint.

That just might be the idea.


On Jul 30 02:06 PM Graham and Dodd Investor wrote:

> The issue is not "did she?" (Of course she did.) That's a "sunk cost."
>
>
> The issue is "does she?" She's down to $2.5 million of her own money.
> That's a far cry from $44, which means that the suit is a waste of
> time.
>
> Unless the idea is to drive her into outright poverty.

Starting Short Positions in Eaton, Wynn Resorts and Capital One Financial

Nice picks. What kind of stops do you have on these? Just curious since they're in uptrends.