Highlights: 83% successful trades & account up 6%!
July was another successful month for The Oxen Group. We saw our Oxen Picks account grow by over 6% due to numerous successful trades (15 out of 18, or 83!). In July, the market recoiled back from a stream of losses as tech and financials led the month. Playing the oil and energy ETFs was particularly profitable, as the energy market continues to be volatile. We are looking for the month of Augus for a defining month as we enter a post-recessionary market that will either continue to look forward or hit some bumps in the road. With the market being extremely overbought and overvalued, we may spend the beginning of the month somewhat sideways as investors await more big news and more bargains to present themselves.
Here are more more statistics from the month of July, trading my account:
Our account increased from 4481.77 to 4758.47 in month of July. That is an increase of 6.17%.
We had 15 positive trading days out of 18.
Six of 18 days gave us 3% gains or more.
We began a 3% stop loss policy. This was beneficial on two days when the stock we bought trailed below 3% from our entry price.
Our account has now moved up 58.62% in 86 days of trading or 4 months.
I came across this chart today, categorize it in the "for what its worth" department:
[Click on charts for larger view]
Let’s see how the above seasonality charts compare with my own SPX chart:
SPX – 120 minute
Counting eight bars from the right we can see the gap-up open to a new summer high in Thursday’s first bar. But look underneath at the Elliott Oscillator. Eight bars from the right is a major divergence, not even close to a new high for the move. If the S&P breaks below 985 Monday and stays below it, we get a trend sell signal that should carry at least 50 points lower. That would coincide with a break down of the trend regression channels with even more bearish implications.
Zooming out, here is the Weekly chart with Fibonacci levels and the False Bar Stochastic:
This is where the above seasonality chart is especially poignant. Prices have engaged the first major Fibonacci level of 38.2%. A turn down here, accompanied by a break down of the regression channels and another crossing of the FBS down below it’s signal line adds up to compelling evidence of a change of trend that could lead to the initiation of the next impulsive leg down.
If this analysis sounds familiar, it is because it has been hanging around these charts for the past six weeks. The consensus of the bulls is that we are in a new bull market, that the recession is over, or about to be over, that the government has pumped enough liquidity into the system to have saved the day and that the bear market is finished and its loyal adherents, especially those like me who say the worst is yet to come, just don’t have a clue.
Remember, in March, this bearish take was the view of the many. Today, August 1, it is the view of the few, as another piece of the puzzle falls into place.
All of this is predicatedupon a break below support on the above two-hour S&P chart.This has not yet occurred and unless and until it does, the trend is higher. [Ilene's emphasis]
That’s it for a Saturday in August. It’s 110 here in the desert and about time for a cold one.
Here’s an interesting article by Susan Blackmore. While there are parts of Susan’s article I might disagree with, the general idea opens up a whole new set of memes, for me – the third replicators. So, the first replicators are our genes. The second replicators are memes – ideas, the basis of cultural evolution. Using the machinery of the second replicators (human minds), we have have built the third replicators.
WE HUMANS have let loose something extraordinary on our planet – a third replicator – the consequences of which are unpredictable and possibly dangerous.
What do I mean by "third replicator"? …
About 4 billion years after the appearance of the first replicator, something extraordinary happened. Members of one species of lumbering robot began to imitate one another. Imitation is a kind of copying, and so a new evolutionary process was born. Instead of cellular chemistry copying the order of bases on DNA, a sociable species of bipedal ape began to use its big brain to copy gestures, sounds and other behaviours. This copying might not have been very accurate, but it was enough to start a new evolutionary process. Dawkins called the new replicators "memes". A living creature, once just a vehicle of the first replicator, was now the copying machinery for the next…
Memes are a new kind of information – behaviours rather than DNA – copied by a new kind of machinery – brains rather than chemicals inside cells. This is a new evolutionary process because all of the three critical stages – copying, varying and selection – are done by those brains. So does the same apply to new technology?
There is a new kind of information: electronically processed binary information rather than memes. There is also a new kind of copying machinery: computers and servers rather than brains. But are all three critical stages carried out by that machinery?
Machines now copy information to other machines without human intervention…
“Treasury Secretary Timothy Geithner and National Economic Council Director Larry Summers both sidestepped questions on Obama’s intentions about taxes. Geithner said the White House was not ready to rule out a tax hike to lower the federal deficit; Summers said Obama’s proposed health care overhaul needs funding from somewhere.“
The Wall Street owned insurer Customer Asset Protection Company, known as Capco, may not be an off-shore company. But it sure operates like one of those Cayman Island based tax shelters president Barack Obama has targeted.
Capco is the mysterious company owned by WallStreet giants like Morgan Stanley and Goldman Sachs, banks like JPMorgan Chase and Wells Fargo, smaller brokerage firms, and Fidelity, the mutual fund giant. Years ago Capco moved from New York to Vermont, where state law enables it to operate without disclosing much about its finances.
It’s official address is 100 Bank Street, Suite 610, in Burlington, Vermont. But if you go there, you won’t find an office marked with the name Capco. Instead, you’ll find an office marked Marsh Captive Solutions, which is a division of Marsh & McClennen that administers captive insurance companies. A total of 185 business are run out of Suite 610.
This brings to mind the story Obama used to tell on the campaign trail about “the outrage of a building in the Cayman Islands that had over 12,000 business — businesses claim this building as their headquarters. And I’ve said before, either this is the largest building in the world or the largest tax scam in the world.”
So how big is Suite 610? We suspect it’s a small office with a bunch of secretary types and filing cabinets. The reason it houses so many companies is that these captive insurance companies are registered in Vermont to avoid tighter regulations in other states.
For those of you who missed it, today Capco was dragged out of the shadows by New York Times reporter Zach Kouwe. The company was formed to insure customer accounts above the $550,000 of SIPIC insurance. The idea was that customers didn’t need to worry about the insolvency of their broker because Capco was insuring it. But now Capco appears to be massively insolvent, facing a possible $11 billion in claims from the collapse of Lehman Brothers with only about $150 million with which to meet them. New York State regulators are worried, and the Wall Street owners could wind up having to pay the bill.
First, we have Corus, which reported a negative Tier 1 Ratio. That is, they are formally "in the hole" in terms of assets vs. liabilities. This is never supposed to happen – but it did, "Prompt Corrective Action" be damned.
Based on these adjustments, the Bank’s core capital ratio stood at negative 5.78% as of March 31, 2009. The Bank’s total risk based capital ratio as of March 31, 2009 stood at negative 5.52%. Both of these ratios result in the Bank being considered critically under-capitalized under regulatory prompt corrective action standards.
Yet Prompt Corrective Action (PCA) – a law, by the way, not a suggestion – has once again not been followed.
Finally, we have Colonial. I made a nice chunk of coin shorting and PUTting that turkey last year, when their CEO (and a lot of other people) said they were "very conservative." Uh huh. My read of their balance sheet said they were (like many other regional banks) massively over-exposed to condo construction loans in….. you guessed it…. Florida (which incidentally is what killed Corus.) Oops. But here’s the money quote on Colonial:
If the FDIC were to seize Colonial, it would be the sixth-largest seizure, by assets, in American history. Such a large failure could strain the bank safety net. Colonial has $20 billion in deposits, while the FDIC insurance fund has dropped below $15 billion. The FDIC wouldn’t have to cover every dime, but when Florida’s BankUnited, with $12.8 billion in assets, failed earlier this year, it cost regulators nearly $5 billion.
Add all three of these up and tell me what you think is going on?
These three are not small banks. They are significant regional institutions, unlike the tiny little banks that we hear about every Friday after the close of business.
Here’s the nut to the story above: When BankUnited was
Everybody was looking forward to hear what Janet Yellen had to say last week, as people were waiting for a cue about what the Federal Reserve might do next month and later this year. Will the Fed keep the interest rates stable? Or will we indeed see three additional rate hikes to push the benchmark interest rate towards 1.25%?
The side effects of Negative Interest Rate Policies in Europe and Japan — what we’ve come to call the NIRP absurdity — are becoming numerous and legendary, and they’re fanning out across the globe, far beyond the NIRP countries.
Seven of the eight indexes on our world watch list posted gains over the past week, up from five the week before, and the average of the eight was an impressive 2.60%. India's SENSEX was the outstanding out performer with a 5.34% surge, and three indexes, France's CAC 40, the Hong Kong's Hang Seng and Germany's DAXK closed the week with gains in the mid-three percents. China's Shanghai was the sole loser with its fractional 0.16% decline. Japan's Nikkei had the second worse performance with a modest gain of 0.59%. Incidentally, the Nikkei about 4% below its late January close when the Bank of Japan adopted its negative interest rate policy.
The rally in mining stocks since the first of the year has been very impressive.
The rally has taken Gold Miners ETF GDX up to test the 23% retracement of the collapse over the past 5-years. At the same time it is hitting the 23% level, two other resistance lines are being put to a test, with momentum at the highest levels in the past 5-years.
Graham Media Group, Inc., a Graham Holdings Company (NYSE: GHC) subsidiary, said it struck a deal with Nexstar Broadcasting Group, Inc. and Media General, Inc. to purchase WCWJ, a CW affiliate television station in Jacksonville, Florida and WSLS, an NBC affiliate television station in Roanoke, Virginia for $60 million in cash and the assumption of certain liabilities.
The agreement to acquire Nextar Broadcasting included pension obligations. Graham Media Group, Inc. would continue to operate both stations under their current network affiliations.
Graham Media said the acquisition is subject to approval by the FCC, other regulatory appr...
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Do you remember when you were growing up and all your friends were allowed Atari game consoles but you weren’t?
Well, I do and the things seemed as foreign to me as Venus. Mostly because the little time I managed to spend on the gaming consoles when my friends weren’t hogging them I found it all a bit silly. I never “got” computer games, and to this day still have poor comprehension of things like Angry Birds.
I suspect that many people around the world view Bitcoin in the same way as I view Angry Birds: with mild amusement and a general lack of understanding as to what the hell all the fuss is about.
I was thinking of this since a buddy of mine recently started ...
After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
Although we try to stay focused on finding and managing promising trade ideas, the comments in the comment section sometimes take a political turn (for access, try PSW — click here!). So today, Jean Luc writes,
The GOP debate last night was just unreal – are these people running to be president of the US or to lead a college fraternity! Comparing tool size? The only guy that looks semi-sane is Kasich. The other guys are just like 3 jackals right now.
And something else – if Trump is the candidate, that little Romney speech yesterday is probably already being made into a commercial. And all these little snippets from the debate will also make some nice ads! If you are a conservative, you have to be scared now.
Phil writes back,
I was expecting them to start throwing poop at each other &n...
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Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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