Strategies & Market TrendsWaiting for the big Kahuna

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To: Mario :-) who wrote (92595)7/1/2010 12:03:32 PM
From: Terry Whitman
   of 94613
Thanks 4 posting the charts. Looks like the bulls still have a sliver of hope (A/D line not confirming, yet).

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To: Mario :-) who wrote (92595)7/2/2010 1:33:56 PM
From: William H Huebl
   of 94613
Right. And it's a breakdown of a classic H&S. Of all patterns, the H&S pattern is the most reliable - I have heard figures of 95% reliability.

So 875 or thereabouts on the SPX, here we come. And if investor's get spooked by that, it is a long way down to the bottom of the prior sell-off - around 675 on SPX.


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To: Terry Whitman who wrote (92596)7/2/2010 1:51:56 PM
From: William H Huebl
   of 94613
The following reply to you may have gone awry.... so it bears repeating:

Spot on, as the English say.

And daily Pring chart is not looking good:

But weekly Pring hasn't made it there yet:

Traditional P&F charts are calling for the 900 level:[PA][D][F1!3!!!2!20]&pref=G

And ATR P&F charts call for the 878:[PA][D][F1!3!1.0!!2!20]&pref=G

And we could go on and on and on...

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To: asymmetricbet who wrote (92594)7/2/2010 2:26:06 PM
From: William H Huebl
2 Recommendations   of 94613
Normally, I do not like to comment on individual stocks - that is not what this thread is about.

That being said, you have picked a situation in which the stock itself is exhibiting much technical weakness and at the same time the general market seems like it is about headed for the tank.

Just for argument sake, let us say the reverse were true... we were in a strong move up in the markets and you had picked a strong leader which was moving up strongly. If everything you said about FUQI were reversed with this fictitious strong mover, would that be a reason to sell it?

There are many strategies for picking stocks to buy and sell. Picking a stock because their management hasn't submitted their 10-ks is not one I have ever heard of unless I am hearing you wrong.

But it was a great question and perhaps it will get folks to review each stock they have in their portfolios. If they all look like the markets in general, you might as well buy an index fund. And if so, there seems like there are hard times ahead. If your stocks are going up while the market tanks, then so much the better.

So thank you for your thought-provoking post... keep up the good work. I know we all have learned so much by posting here on SI and having others comment.

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To: William H Huebl who wrote (92600)7/2/2010 11:32:06 PM
From: puborectalis
   of 94613
from Bloomberg

Barton Biggs, whose investments in stocks 15 months ago gave his Traxis Partners LLC a 38 percent gain in 2009, said concern the economy will contract spurred him to sell almost all his U.S. technology shares this week.

Biggs said he reduced the proportion of bullish bets in his hedge fund by up to 40 percentage points on speculation the withdrawal of government spending will turn a “soft patch” into a recession. On June 29, Biggs said long investments made up 70 percent of his fund’s holdings.

Stocks in the U.S. fell for the ninth time in 10 days today after data on jobs and factory orders added to concern the economic rebound is slowing. Speaking in a Bloomberg Television interview today, Biggs said “policy mistakes” by politicians may curb the expansion in U.S. gross domestic product that economists forecast will be 3.2 percent in 2010. The S&P 500 has retreated 16 percent since April 23.

“I’m worried that we could have not just a soft patch, but a double dip which lasts two or three quarters and where nominal GDP is only up 2 or 3 percent, and that’ll have a big effect on profits,” he said. “It’ll scare everybody and I’m afraid the market goes down another 10 or 15 percent if that happens.”

Government Spending

Biggs said it would be a mistake to rein in government spending at a time when global economic growth is weakening. The largest economies should aim to cut deficits in half by 2013, the Group of 20 nations said on June 27 after a meeting in Toronto.

“The economic numbers that are coming through are very disappointing,” Biggs said. “I don’t know what’s going to happen. Maybe the politicians respond. We don’t know.”

The 77-year-old money manager said he’s pared back investments in the U.S.

“I sold stocks pretty aggressively in the U.S. and we had a lot in tech,” Biggs said. “I’ve taken basically all of it out in the U.S. and we had a broader exposure to consumer stocks and just, in general, I’ve reduced my net long position by about 30 or 40 percentage points.”

Biggs comments reflect the pressure on investors as the steepest rally since the Great Depression started to fizzle in April. Hedge funds lost an average of 2.6 percent in May, according to the HFRX Global Hedge Fund Index, as the European debt crisis triggered declines in stocks, the euro and commodities.

Lehman Bankruptcy

It was the biggest decline since November 2008, when hedge funds lost 3 percent following Lehman Brothers Holdings Inc.’s bankruptcy two months earlier. About $3.5 billion was withdrawn from hedge funds in April, according to TrimTabs Investment Research and BarclayHedge estimates.

Traxis was buying household product suppliers, drugmakers and computer companies at the start of the year, speculating they would prove bargains as earnings surged, he said in a Dec. 29 interview with Bloomberg. In March, he said stocks remained cheap relative to forecast earnings and predicted the global economic recovery would be strong.

“I’ve changed my mind,” he told Bloomberg today. “I’m not wildly bearish, but I don’t want to have a lot of risk at this point. I’m not putting my money into anything. I’m raising cash.”

Biggs, who earlier this week predicted S&P 500 companies would earn a combined $85 to $90 a share in 2010, now says profits may be as low as $70 to $75 if the economy slows. The low end of that range implies a price-earnings multiple of 14.6 for the S&P 500 today, about equal to its historical average.

Biggs said the second recession in three years isn’t inevitable, comparing the stock market to the end of the 1982 contraction when the S&P 500 declined 13 percent. An advisory firm founded by another equity bull, Laszlo Birinyi, published research yesterday drawing the same comparison.

“This is what always happens at this stage of the cycle,” Biggs said. “We are at exactly the same stage in the cycle as we were in 1982, using the exact kind of words: ‘The U.S. economy is collapsing, the world is collapsing, it’s the worst time since the Great Depression.’ Blah, blah, blah.”

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To: puborectalis who wrote (92601)7/3/2010 8:37:40 AM
From: William H Huebl
   of 94613
When all the advisors are bearish, then we may be at the bottom?

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To: William H Huebl who wrote (92602)7/5/2010 10:32:49 PM
From: puborectalis
1 Recommendation   of 94613
Obama Gets a Bum Rap With Anti-Business Charge: Albert R. Hunt

July 5 (Bloomberg) -- President Barack Obama rejected calls last year to nationalize the big banks, opting instead for market-based stress tests and injecting more private capital; he disappointed liberals by turning down a government-run national health-care program, and assists the struggling U.S. automobile industry to survive as a private enterprise.

In the face of the worst economic crisis since the Depression, corporate profits since Obama took office have soared 40 percent, and the stock market, despite the recent slump, has risen more than 27 percent.

Still, corporate chieftains complain the Obama administration is anti-business and crushing free enterprise with the heavy hand of government. “By reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses,” recently charged Ivan Seidenberg, the chairman of New York-based Verizon Communications Inc., speaking for the Business Roundtable, the major big-business group in Washington.

This criticism rankles Obama. After Seidenberg’s broadside, the president instructed National Economic Council Director Lawrence Summers to complain to him. One of the White House rejoinders is that none of the top economic advisers -- Summers, Treasury Secretary Timothy Geithner or White House Chief of Staff Rahm Emanuel -- is considered anti-business or a liberal ideologue; they have instead incurred the enmity of the political left for being too centrist, too friendly to business interests.

Roosevelt, Kennedy

When business leaders complain about occasional populist rhetoric, the White House reminds them of history: Franklin Roosevelt’s broadsides against the “money changers,” or John F. Kennedy, who after the steel industry raised prices in 1962, said: “I asked each American to consider what he would do for his country, and I asked the steel companies. In the last 24 hours we had their answer.”

Last year, one of the most sophisticated Wall Street leaders privately complained about anti-banking demagoguery in Washington; he exempted the president, though he said Obama should rein in Democratic lawmakers the way Lyndon B. Johnson did. That’s a misreading of history as well as contemporary politics.

There also is a healthy dose of hypocrisy. Seidenberg complained about huge budget deficits and at the same time advocated a myriad of corporate tax cuts that would add billions to the shortfall.

Corporate Tax Rate

The U.S. corporate tax rate is the second-highest among major industrial countries, the Verizon CEO correctly noted. He neglected to point out that the effective marginal rate paid by corporations, according to a study by the administration of President George W. Bush, is within the average of these countries because of all the loopholes championed by business interests.

Among Seidenberg’s other complaints was a provision in the financial-regulation bill on proxy voting for corporate boards that he said goes “a step too far.” This would allow stockholders who meet a high threshold to offer candidates for the board for a shareholder vote; currently, some directors get their posts with as little as one-third of the shareholder votes. More democracy for owners of companies doesn’t seem anti- business.

Business’s Role

For more than 30 years, much of the business community has gotten accustomed to more deregulation than regulation from Washington, even under Democratic Presidents Jimmy Carter and Bill Clinton. Those days are over, with the financial crisis, collapses of mines and the BP Plc oil spill. Big business can simply carp about this or try to fashion middle ground with a White House that has shown a willingness to take on some of its party’s special interests, such as teachers’ unions.

More than a few nonpartisan business leaders have reservations about the health-care and financial-regulation initiatives without the exaggerated charges. There’s a solid business case to be made against the administration for dragging its feet on trade, tempered only by the recent embrace of the accord with South Korea.

And there are important signals the president should be sending or changing. In appearances before the Business Roundtable, he gave canned speeches and then declined to take questions. The business leaders resent that; they have a point.

CEO in Cabinet

Moreover, this is the first administration in memory not to have a corporate CEO in its senior ranks. Geithner and Summers notwithstanding, that sends a message. With the initial Obama economic team breaking up there ought to be a substantive spot for an articulate, credible CEO such as former Xerox Corp. Chairman Anne Mulcahy.

The economic messaging, to business and others, remains muddled. Some prominent business leaders who are Democrats believe the president privately is disdainful of the business community. Even if that isn’t the case -- it probably isn’t -- Obama should realize that’s what he too often conveys.

A healthier, if sometimes adversarial, relationship also requires major changes by business leaders, starting with the Business Roundtable. Their critiques need to be more balanced, including calling out Republicans for charges such as Obama is moving the country toward “secular socialism.”

The looming fiscal crisis offers an opportunity. The Business Roundtable has promised “constructive suggestions” about the need for deficit reduction and entitlement overhaul.

Call for Sacrifice

If the result is simply, let’s reduce the deficit on the backs of the working class while providing more tax breaks to wealthier Americans and corporations, they’ll just be one more group of special pleaders. A more thoughtful, balanced suggestion -- to the political right of where Obama and most Democrats will be -- that entails some sacrifice from their ranks would afford credibility. That’s true, too, for the president, if he tackles tough issues on the entitlement side, like cutting back on the growth of Social Security.

Many Middle Americans really do despise Wall Street, BP and the oil companies and bitterly resent the outsourcing of jobs. That’s not a product of the policies or rhetoric of Obama or Washington politicians. It’s because they genuinely believe that in these difficult times, fat cats are privileged and protected while they’re getting the shaft. It’s in the interests of both the Obama administration and the business community to appreciate and address this reality.

(Albert R. Hunt is the executive editor for Washington at Bloomberg News. The opinions expressed are his own.)

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To: puborectalis who wrote (92603)7/6/2010 7:31:17 AM
From: William H Huebl
   of 94613
Don't forget the link when you post articles.

I don't know if leaving out the link is a reportable TOU violation, but I'll bet SI would have something to say to you about that.

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To: William H Huebl who wrote (92604)7/6/2010 8:54:17 PM
From: puborectalis
   of 94613

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To: puborectalis who wrote (92605)7/7/2010 5:45:37 PM
From: William H Huebl
   of 94613
I couldn't bring it up but I searched and got this:

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