from davio redrock@peternavarro.com

Read the released Fed minutes from yesterday and you tell me whether the info is good/bad/indifferent. I find it quite perplexing with all the true negative news out there with GM< DELL<TOL etc all falling apart at the seams what an odd divergence we have in upward price movements. Enjoy it while it lasts I guess.

Here is the Fed Release.

FOMC Minutes, Nov-01-05: “The rise in longer-term real interest rates and some widening of private credit spreads in recent months were seen as perhaps having a little restraining effect on the investment outlook.

Economic growth in the near term was likely to be boosted by additional fiscal stimulus, in part to support recovery and rebuilding from the hurricanes. Strong demand from overseas was evidently boosting exports this year by more than the increase in imports, with the nation's external accounts thereby providing a small net positive contribution to growth in domestic production. Next year, however, the arithmetic contribution to growth from net exports was seen as likely to return to negative territory.

While participants noted some recent favorable data on core inflation and labor costs, upside risks to the outlook for underlying inflation remained a key concern. Wage gains had remained modest relative to continued strong productivity growth, suggesting that labor costs were not putting much upward pressure on prices. Indeed, core inflation continued to be subdued, and in recent weeks gasoline prices had unwound a significant portion of their steep increases. Nevertheless, there was a risk that the large cumulative rise in energy and petroleum product prices through the summer would be transmitted to core consumer prices. A number of firms had been reporting a greater ability to pass through increases in energy and other costs to customers, though evidently more so to other businesses than to consumers. A survey measure of the near-term inflation expectations of households had risen notably, but intermediate- and longer-term inflation expectations implied by Treasury security yields had remained fairly stable. It was noted, however, that longer-term expectations of inflation remained contained in the context of an increase in the extent of additional monetary policy tightening expected in financial markets.

In the Committee's discussion of monetary policy for the intermeeting period, all members favored raising the target federal funds rate 25 basis points to 4 percent at this meeting. The economy seemed to be growing at a fairly strong pace, despite the temporary disruptions associated with the hurricanes, and underlying economic slack was likely quite limited. In that context, all members believed it important to continue removing monetary policy accommodation in order to check upside risks to inflation and keep inflation expectations contained, but noted that policy setting would need to be increasingly sensitive to incoming economic data. Some members cautioned that risks of going too far with the tightening process could also eventually emerge. Nonetheless, all members agreed to indicate at the conclusion of this meeting that a continued measured pace of policy firming remained likely.”

from davio redrock@peternavarro.com

Americans usually transfer power every four years about this time in the month. But this year – this month – there was a transfer of a different kind of power.

I am speaking of the transfer of power of U.S. capitalists to foreign capitalists as witnessed by the slow death that is going on at General Motors.

The decision by the GM management and board to cut 25,000 more jobs includes 4,000 in Canada, and 19,000 in the U.S. That’s interesting because all but a couple hundred of the GM Canada cuts came at Oshawa Ontario, which just happens to be at the highest rated (productivity and quality) plants that GM owns.

Many of those workers will not skip a heartbeat. Toyota and Honda are expanding rapidly in Southern Ontario, including brand new plants. So some of the best quality jobs in the world are now going to migrate from U.S. control to Far East control.

This is all part of a process as Americans let America fall apart.

Sometime in the future,it would be my guess that Japanese capitalists will move these U.S. and Canadian auto factories back to Japan, where they will employ their own children in the best quality jobs in the world.

And if you think they have to be close to consumer markets, then I beg to differ. Who do you think builds the world’s biggest ships? These ships will become floating cities. Why pay for inflated North American real estate prices to house these new cars on local car lots? They might as well be floating across the Pacific on their way to a buyer who has made the purchase by website. No inflation there.

from davio redrock@peternavarro.com


One of my favorite indicators are Tom DeMark's studies. They are deep, but pick up one of his books on Trading options or view the web for some info and you will learn more. When the short term (60 minute or daily) DeMark Signals don't work, it usually means investors in a longer timeframe are in control of the market. That means if you are looking for sell signals on an intraday or daily basis, you'll probably run into more days like last Thursday - the buying will just overwhelm the short term traders.

Looking to the weekly DeMark indicators, this bull move still seems like to want to run several more weeks. The DeMark Combo (TM) is currently registering a 4 of 9 on the weekly chart.

from davio redrock@peternavarro.com


Shockingly as we crawl into the long holiday weekend. And yes , we are open tomorrow and half of Friday but in all reality the inmates are left running the asylum for the remainder of the week. We should have nice month end mark up games for early next week. All that said, I think this market is nearing a nice 2-3% correction into early December. We are nothing but straight up over the course of November and all tides have floated together, stock, bonds, commodities, you name it. Don't be afraid to ring the register even if the Fed may stop raising rates. I will post periodically over the weekend, but enjoy family and friends and Happy Thanksgiving.

from davio redrock@peternavarro.com

Downgrade of YHOO today, puts the stock down about $1 buck. Bird flu is in Canada so no more chicken soup from up north.

Susquehanna downgraded YHOO to Neutral from Positive saying the lion's share of its valuation gap relative to peers has closed and several potential sources of upside to earnings have been moderated or postponed. Yahoo! has delayed major technology upgrades to its search auction that the firm had hoped would add significantly to 2006 earnings and invested $1.5 bln of its cash balances into longer-term opportunities that may not add materially to their 2006 forecasts. The firm says downside could occur if YHOO loses advertising market share due to increased competition with MSN and Google, or if consumer spending is weaker than expected.

from davio redrock@peternavarro.com

Market grinding away higher, with volatilities back in 10.88 range. It should get worse on volatility levels before it gets better. No one is concerned at all as is evidenced by the weak put/call ratios. Plus holiday will drive volatility away quicker than you can say my Alma Mater will stray from
a prevent defense when leading by 9 pts at home with 6 minutes to go and blow another game versus the dark side from Columbus.

from davio redrock@peternavarro.com

We open after November expiration to a very flat market. We have GM cutting off more paychecks. No suprise there, but when will they cut their dividend? A good week to watch the volume drift away as the holiday looms large. I don't expect too many fireworks, I would like to see a little sell off on the SPs if we are to continue the end of year shenanigans to the upside. 1252 currently, let's see where they go. Don't force it on this thin trading week. Best to watch and see where we are shaking out for next weeks December run!!

from davio redrock@peternavarro.com

from Davio redrock@peternavarro.com


I was reading an article about the California real estate market, and this line stopped me cold:

Nearly 2 percent of adults in California hold a license to sell residential property in the state, where $30,000 commissions on million-dollar homes have become commonplace.

from Davio redrock@peternavarro.com


Tradesports is a Web site where you can buy futures contracts on real world events. As you may have heard, there are several unconfirmed reports that Mr. Zarqawi just got his ass blown up.

Here’s how the contract for "captured or neutralized by December 31” has been trading.

zarqawi.png

Something’s definitely up. I’m rooting for neutralized.

What I find fascinating is that even when we don’t have a lot of hard news, the market is an excellent mechanism for analyzing and prioritizing information very quickly.

from Davio redrock@peternavarro.com


Crude Oil contracts (NY Crude EOD chart at StockCharts) dropped –2.17 pct W/W to 57.21, after being down –3.47 pct a week earlier.

But my sense is oil traders want to hold up oil prices out of expectations of the coming winter freeze. On the other hand, I have to grapple with the fact that the bond yield curve is almost flat, which portends less strength ahead in the U.S. economy than anticipated by most traders and the public.

When I look at the unit shipments of Big Oil, which are like +2 pct Y/Y, I just cannot understand why the TH’s are screaming there is a rocketing economy here. And isn’t it ironic that the same people are saying that oil prices are going to $30? Maybe it’s inflationary pricing then? Nope, the same people won’t hear of that talk either.

Here’s my worry. OPEC could decide they have had enough great years out of the USD that they are now going to switch their pricing to Euros and ride that currency up. Now, that’s really having your cake and eating it too. And wouldn’t that be enough to literally smash the U.S. economy in the years ahead?

from Davio redrock@peternavarro.com

Love this recent Post, from Alan Farley on Trading Mistakes. Just flat out great information for any body aspiring to trade their way to profits.

1. Fearing you'll miss the big move.
That's the biggest error traders make on a regular basis. It goes like this: You want in badly, but you're too scared to act. Finally, the fear of missing out overcomes your better judgment, and you jump in. But the move ends abruptly, and you're left holding the bag.

2. Trading too big
Every position has a right size. Never trade over that amount, regardless of the account size. And forget about using margin until you know what to do with it. There's absolutely no rush to make your first million.

3. Taking a bad trade 'cause of a stock guru or analyst
It's your money at stake -- don' let someone else tell you what to do with it. Do your homework before you enter the market and then take responsibility for your actions.

4. Getting carried away by emotions
The market is indeed a scary place, but you'll lose a fortune if you let your feelings control how you trade.

5. Impatience
I have a nasty habit of pulling good trades off the table just minutes before they go vertical. Somehow, my subconscious mind sees the profit I'm about to make, and decides I'm just not worthy.

6. Trading Software is no substitute for good trading skills.
All that heavy-duty code and processing power Pretty colors flashing on a state-of-the-art screen won't make you a better trader, but they can make you a poorer one.

7. Trading like Gamblers
The bottom line: You will get hurt whenever you trade like it's a horse race.