Jim Hawthorne

Adjusted Jobless Claims Suggest Recession Has Ended

Dr. Spin! Please!
The deeper one examines the employment picture, the worse it gets!
(See: www.ritholtz.com/blog/.../ )
There certainly is meaningful debate ongoing as to whether or not the recession has ended. But to attempt to use the Initial Jobless Claims as support for the recession's end at this point is truly silly!
Just we can't have an 'earning-less' recovery, so too is a 'job-less' recovery and "Alice in Wonderland" fantasy!

Shorting the Double Dip

Thanks for the article! I notice you don't advocate diving into the Ultra-ETF's in your recommendations (SMN FAZ QID SRS EDZ TZA, %etc.) Granted these are indeed risky, but they carry much less risk profile than naked puts of SPY!

With earnings season upon us, there is growing pessimism in the marketplace that a repeat of July is possible. As the Financial Times recently noted, the breadth of collapsed earnings is deep and pervasive; especially in the materials sector. The "wall of worry" may well be about to give way to the "slope of hope"!

If we do indeed enter a correction, there is a long way down before the S&P500 finds strong support at around 940! Whatever the outcome, the 'easy' money has already been made!

Signs of Recovery?

True layoffs have perhaps peaked; but then the 'expendables' are long gone, and in many cases, those still employed are working at reduced wages, reduced hours, or both! There is not yet evidence of increased hiring and increased spending.
As for initial jobless claims, let's remember that they last peaked back in springtime 2001; almost 2 years before we saw a true bull martket in equities!
Be nimble and flexible enough to play this stage of the rally up or down as it develops! "Buy and Hope" is a truly dangerous strategy at the stage! Good luck to all!

Surprise, Surprise, Surprise: Positive Economic News Everywhere

A word of caution: while I agree that we have seen some positive news and as Bespoke reports, earnings are beating analyst expectations at a high rate, let's pause and look at the much more depressing YoY drops in earnings and sales!!! There is no doubt that this year's rally has been a great ride, but it looks more and more like we are approaching overextended territory here!
We took welcome profits and moved back into cash on Friday in a move that was purely based on capital preservation! At this stage of the rally, we can make up for lost opportunities much more readily than we can make up for lost cash!

Where Will All the Sidelined Cash Be Invested?

As we now appear to have stock prices at or near the top of their trading range, I doubt that there will be any huge swing of sidelined cash into equities until we see a successful test and hold of S&P500 support around 925. If support holds there, then expect another leg up to new highs near S&P 1000. Failure of support will almost certainly result in a test of the 890 lows.
In this environment, we went back into 85% cash on Friday.
Once again, this is a market for the nimble and flexible trader. I look for leadership in tech, oils, the greens and the miners on the next leg up, but will short via the inverse ETF's if we see a correction here.
After a beautiful rally, capital preservation is once more on the agenda!

In Defense of Buy and Hold

I am in agreement with Jasper M above! There is neither excuse nor rationale for accepting crippling losses through the use of a strategy which owes it's following to the experiences of the last century and ignores present market trading realities!

There is a huge difference between 'timing the market' and 'trend following' based on a combination of fundamental and technical analysis! While timing exact market tops and bottoms may be a fool's errand, recognizing trends through careful analysis is not, and watching the direction 5, 10,15,25,and 50 day moving averages will tell you most of what you need to know.

'Buy and Hold' cannot only be called a lazy man's strategy; it really is no strategy at all!

Party Like It's 1931?

We've all have a great ride since the first week of March! While it's been very profitable fun, I also feel a growing wave of uncertainty.

While comparisons between today and the 1930's are indeed riddled with critical differences, we also suspect that 'bottle-rocket' rallies like this one fly about as well as a grand piano when the steam goes out of them!

Bank Failures: Not a Significant Indicator

Once again, news is just that.... news!

What is critical to us is not necessarily the news itself, but the only thing to note is the Mother Market's reaction to it! Trying to predict how the market will react has become a very risky business! We see time and time again the market's ability to shrug off news that would have been horrendous enough to cause a crash 24 months ago!!!

How Will Markets React to Mexico's Swine Flu Panic?

How Will Markets React to Mexico's Swine Flu Panic? With some degree of panic; the Airlines will tank and the baby pharmas like SVA and PBME etc. will rocket skyward.

The U.S. Is Spending Its Way Out of the Recession

You advice for investors "to go long on the overall markets" without a word of caution is dangerously premature!

The "gamblers" today are both taking profits from the rally and shorting for a retest of the March lows. I would be extremely careful about diving into this frothy market at the present time!

Interview with Peter Schiff: Reflating the Bubble

Excellent, thought provoking article! Thank you!

Peter's opinions are always a valuable addition to the ongoing inflation/deflation debate here at SA.

We should note, however that the current contraction is both global and synchronized; and that both the US and China appear thus far to be coping far better than Europe, Asia (ex China), Latin America, or the CIS/Baltic region.

Peter's prediction may well be come true in the long term; it may just be a matter of timing. Short term we may very well experience a deflationary period where the forces of increased savings, reduced consumption and price declines stave off the inevitable inflationary run-up.

I would look far a well-tested bottoming process to end prior to jumping into any commodities save precious metals, which seem to do fine in both deflationary or inflationary periods!

The Case Against Re-Regulation

Ah, yes! Put the foxes back in charge of the hen-house and let the arsonists run the fire department!

You write that, "The answer is corporate social responsibility based on moral business decisions with the interest of the entire economy in mind."

You seem to be advocating a sort of "faith-based" economic system relying upon a corporate leadership elite totally made over and remodeled; sort of a bizarre version of the 'Stepford Wives'?

Yes, there was poor oversight; there was also blind faith in Adam Smith's 'unseen hand', and a mistaken notion that deregulated markets would 'naturally' regulate themselves. Please, don't set us up for a sequel!

Time to Buy Volatility?

Why not just throw ALL the paddles out of your canoe while you're at it! Do you not realize that we are ALL still up the creek???

On Apr 14 09:01 AM Cetin Hakimoglu wrote:

......."The VIX is no longer interesting or meaningful..."

Time to Buy Volatility?

A pullback at this point would be both fundamentally healthy and a near technical necessity...

The VIX will bounce from support. Prudence dictates profit-taking!

Dynamism and Innovation in Finance: The Path to Future Bailouts

We now have a 'Financialized' Economy, mainly based on moving money around to facilitate mindless consumerism sated by overseas production; a kind of sad shell-game.

While the Financial Sector may well claim to be both Dynamic and Innovative, all I see is a tired old whore gleefully struggling into a new Wal-Mart Lyrca mini-skirt so as to once again hit the streets as the new and improved 'Miss Dynamic & Innovative'.

Yes, the poor old dear will require yet another bail-out.