Archive - Mar 2010 - Blog entry

Today's perfect doji on the daily chart of El Paso (EP) illustrates a specific type of trade setup that we at Fibozachi scan for. The tenor of 'this' price action is symptomatic of short-term exhaustion, typically resulting in an immediate correction over the next few sessions (1-3). On this expected setup the pre-defined (anticipated) risk/reward ratio is over 4:1 ... which means that one need be 'correct' c. 25% of the time to break-even (save commissions + slippage). Trading is nothing if not a probabilistic endeavor and we like those odds.

If we did these things, we wouldn't have to raise taxes OR cut core services to the American people ...

There is a great buzz in the marketplace about new private equity funds being raised to invest in failed banks. The story goes something like this: We are organizing a fund led by the former heads of federal regulatory agencies with big time connections in Washington. These DC players are going to get a front-row seat to play in the sales process for failed banks being run by the FDIC. These funds claim that FDIC Chairman Sheila Bair is giving assets away for nothing and we are all going to make a lot of money in that old fashioned Washington way, namely slopping at the public trough. Unfortunately none of the above is true and many of these "offerings" are misleading or fraudulent.

The big boys have gotten a LOT bigger

The press has recently been flooded with exaggerated reports of widespread well poisonings and forest destruction. A blank check to render toothless any Cap & Trade legislation, block subsidies for natural gas, dilute environmental legislation, and promote the myth that the whole global warming thing is nothing more than a leftist hoax. The ghost of the Swift Boat Veterans for Truth returns to haunt. Thanks Dick Cheney! Tell it to the 23,000 Americans coal emissions will kill this year. (BTU), (RTP), (ACI).

The Ontario Municipal Employees Retirement System (OMERS) announced a 10.6% rate of return for the year ending December 31, 2009, and won an award for Canadian pension fund of the year. Did it really merit this award?

About a year and a half ago I warned that HSBC would be facing
increasing and unanticipated (I was a contrarian on the China bubble)
losses/slowdown in Asia, as well as increasing losses on bad debt in the US. I
believe I was one of the very few who threw this caution out there.

Brace yourself. Nothing is going to happen. A portfolio manager’s worst nightmare, and a trader’s dream come true. Selling out of-the-money-strangles, last year’s suicide trade, could be this year’s steady earner. The VIX will continue to bleed to lower levels. Hiding out in the currency crosses. (SPX), (FCX), (VIX), (USO), (GLD), (TBT), (TBF)

If insider expectations continue to remain low, then why should yours remain high?