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Killer Bunny
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Selling off?

Yes, from ridiculous to very high. As to the interpretation of that, it's hardly a punt on inflation at this point.

Yields are still at historically very low levels. The selloff looks more like panic merchants wondering what the feck they were doing buying bonds up there and coming to their senses (p1ssing away great gobs of cash at the same time).

I think the market suggest otherwise. IF you look at what stocks are up / down on every day recently, it appears inflation is a concern, deflation is not. I have some junk bonds, they did very well from December to around a little over a week ago, after that, the market became obsessed with inflation again, and the junk bonds have went down again.

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I notice from your other posts that you don't think house prices will fall much futher.

Is this the root of that belief - that high inflation will make assets of any kind worth having in the medium term?

High inflation = House prices MUCH higher than now in 10 years.

Some people spout on about the stability of the House Price/Earnings ration without seeing what this implies - that the ONLY long term driver of house prices is the level of wages, so a bet on house prices is simply a bet on inflation.

Cheers...

Yes, correct buy a house because some idiot on a forum told you to. I have had discussions like the ones on this forum before, and sometimes you argue against someone that makes you realize you are wrong, not from the facts, but from a deeper level inside your own body you will know when you are delusional. My best gauge is simply the psychology of the discussion. Based on that I can help judge what's the truth, a good discussion with some heat can help bring out the truth. Any kind of asset, but not a big Chevy, I don't link collector coins and that stuff. Bill Gates have investments in a company that collect trash from people. That's a perfect inflation hedge as long as the company is the only one in the area. My favorite are soft commodities. I fully think the inflation trend to be of a nature that makes leveraging to the hilt will pay off as long as you have some buffer to take some short term volatility. I am biased as I own real estate, and have hold on to it, even I knew the markets was going to go down. A hint of what to look at is the expenses, not the price of the apartment or house on itself, but the increase in the price of the house, compared to increases in electricity or oil heating, or other shared expenses if it it's an apartment. When seen in that light, the increases don't seem as large.

Soybeans is another: soycpi.gif

I think they have broken out of a long term bearish trend channel, and is likely to stay in a new trend channel for decades.

If you play around with the numbers and look at soft commodities in comparison to the money supply, and prices of everything else of "finished goods", you will realize just how insanely cheap commodities are. Many can buy a ton of sugar from 1 days work. Think of the hours to collect all that sugar, how many slaves had to work for how long.

Edited by carseller
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Right, well I'm selling into this rally.

Don't like the look of it at all. I'm usually a little early, so it may run up a few percent more. But I'm now playing the downside. DYOR. I'm just sharing this because I enjoy our discussions. I'm talking short-term here, not long-term, and within my own, very personal, risk management.

It all has a very strange look and feel doesn't it? The way currency pairs fluctuated today, oil did its suck you in spit you out rinse repeat routine and the Dow moved was all very weird. What's your 'volatility' thoughts?

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Here is another I like: Orange Juice.

http://www.investmenttools.com/images/wfut/clo/jo.gif

It's a steal at these levels.

About the market, lurker, I just throw in my feel. I don't trade as much as you, I just have a portfolio I adjust with some buying or selling, I was up around 1,3 % today, even the dow was down, mostly due to gain from the energy sector and my Chinese stocks, solar energy stocks and bank shares. My feeling is that there is a new round of booze and liquidity getting started, that will lift all boats.

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There are no ETCs for orange juice.

How would you invest?

Thanks.

You would have to open a futures account (or perhaps a spreadbetting or CFD mob). But as a point, these types of commodities are not good "investments". Good trades for sure though, as the price is cyclical.

Agree with carseller that OJ is getting close to minimum value. Wait till you hear news of growers squealing about prices or pulling up trees to grow something else....

...or a Hurricane about to obliterate or Florida or other yield reducing phenomena.

Then go in with ears pinned back (gotta be quick though ;) ). These agricultural commodities are as pure a supply/demand play as you'll ever get.

Long term chart ==>> http://futuresource.quote.com/charts/chart...p;b=bar&st=

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Right, well I'm selling into this rally.

Don't like the look of it at all. I'm usually a little early, so it may run up a few percent more. But I'm now playing the downside. DYOR. I'm just sharing this because I enjoy our discussions. I'm talking short-term here, not long-term, and within my own, very personal, risk management.

It all has a very strange look and feel doesn't it? The way currency pairs fluctuated today, oil did its suck you in spit you out rinse repeat routine and the Dow moved was all very weird. What's your 'volatility' thoughts?

I've got to admit I'm getting nervous still being long. I'm up a few percent, but it looks to me like we're past the 10% up then 10% down swings we've been getting nearly weekly for the past month or two. We're either about to see a big move either way or it's found a less volatile level for now, either way the chances are good that you'll lose out if you're playing one direction only. I think I'll probably reduce my position a bit.

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There is many ways to view this market.

I can share some ideas.

I think Solar Energy stocks are showing a pattern in the charts, that suggest to me, that they are where computer stocks were in 1990.

I'd like to see evidence of that.

I mean sure, there could be exponentially rising demand due to the GW meme, but equally, there might not.

That said, alt-energy in general is a sector to keep an eye on.

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It's two things, it's the graphical, it's the comments from Eric Janson that experienced the dotcom boom as a venture capitalist, and third, it's the numbers. The numbers for solar energy is extremely good. PEG in the 0,01-0,1 for some , fantastic numbers.

Look at this comparison I made..

http://finance.yahoo.com/echarts?s=ORCL#ch...ource=undefined

I mean, how about 0 % for buying stocks? no, for buying house ? no, for buying a roof solar panel? hell yes !

Edited by carseller
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It's two things, it's the graphical, it's the comments from Eric Janson that experienced the dotcom boom as a venture capitalist, and third, it's the numbers. The numbers for solar energy is extremely good. PEG in the 0,01-0,1 for some , fantastic numbers.

Look at this comparison I made..

http://finance.yahoo.com/echarts?s=ORCL#ch...ource=undefined

I mean, how about 0 % for buying stocks? no, for buying house ? no, for buying a roof solar panel? hell yes !

PEG (and indeed PE) is like reading tea leaves at this point in time... no better than soothsaying. There is still some earnings reality yet to come.

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PEG (and indeed PE) is like reading tea leaves at this point in time... no better than soothsaying. There is still some earnings reality yet to come.

Wayne, can I get your view on the put/call ratio please?

I'm looking at the put/call MACD, and although it turned up today, with the large movement, it hasn't crossed over yet. Now, if/when it does, it gives the impression there could be a considerable "upside" move, in the MACD itself. I am interpreting this as the possibility of quite a large move in the index. Short-term VIX held nicely over yesterday's 10dma cross and is now turning up, similarly indicating the possibility of a large move. Finally, closing prices weren't far off day lows. I read all of this as potentially quite negative, until any or all of it is retraced/breaks down of course. Edit: Not necessarily tomorrow, but within a few trading sessions.

Your thoughts would be very welcome.

http://stockcharts.com/h-sc/ui?s=$CPC...id=p33086544296

http://stockcharts.com/h-sc/ui?s=$VIX...id=p47586086556

Edited by Red Kharma
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Particularly SPY etf, if it falls on over 420m volume then the ABC down is likely to have started and this could take us well below the Nov 20th numbers.

Currently heading for 804 S&P. If it breaks 810 and close below. Then sell.

I'm not getting into any discussion about this however much you bully, insult, lie about me.

Volume >500m today. FOR THOSE WHO ARE CLEARLY ILLITERATE, I did say if the volume would be >420m.

Nov 20 - here we come. Nothing goes in a straight line. But of course, there are obviously financial guys who know oh so very much more than me. ( :blink: )

Gold back to 800? But careful - always v dangerous to short PMs. Sell sure. Short dangerous.

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Volume >500m today. FOR THOSE WHO ARE CLEARLY ILLITERATE, I did say if the volume would be >420m.

Nov 20 - here we come. Nothing goes in a straight line. But of course, there are obviously financial guys who know oh so very much more than me. ( :blink: )

Gold back to 800? But careful - always v dangerous to short PMs. Sell sure. Short dangerous.

7,500 for Dow? :blink:

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Wayne, can I get your view on the put/call ratio please?

I'm looking at the put/call MACD, and although it turned up today, with the large movement, it hasn't crossed over yet. Now, if/when it does, it gives the impression there could be a considerable "upside" move, in the MACD itself. I am interpreting this as the possibility of quite a large move in the index. Short-term VIX held nicely over yesterday's 10dma cross and is now turning up, similarly indicating the possibility of a large move. Finally, closing prices weren't far off day lows. I read all of this as potentially quite negative, until any or all of it is retraced/breaks down of course. Edit: Not necessarily tomorrow, but within a few trading sessions.

Your thoughts would be very welcome.

http://stockcharts.com/h-sc/ui?s=$CPC...id=p33086544296

http://stockcharts.com/h-sc/ui?s=$VIX...id=p47586086556

Well if we use it primarily as a contrarian indicator, the 20 day MA is still at an extremely low level. Chuck in your observations on VIX and you'd have to be bearish (even ignoring yesterday's action).

It was like they were just waiting for any excuse to sell out... and they did.

I'm also backing a revisitation of Nov lows within the next 2-8 weeks.

edit to add link ==> http://www.indexindicators.com/charts/sp50...-params-2y-x-x/

Edited by wayneL
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Well if we use it primarily as a contrarian indicator, the 20 day MA is still at an extremely low level. Chuck in your observations on VIX and you'd have to be bearish (even ignoring yesterday's action).

It was like they were just waiting for any excuse to sell out... and they did.

I'm also backing a revisitation of Nov lows within the next 2-8 weeks.

edit to add link ==> http://www.indexindicators.com/charts/sp50...-params-2y-x-x/

Thanks for the reasoning, mucho appreciated. That's a pretty big window...

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Well if we use it primarily as a contrarian indicator, the 20 day MA is still at an extremely low level. Chuck in your observations on VIX and you'd have to be bearish (even ignoring yesterday's action).

It was like they were just waiting for any excuse to sell out... and they did.

I'm also backing a revisitation of Nov lows within the next 2-8 weeks.

edit to add link ==> http://www.indexindicators.com/charts/sp50...-params-2y-x-x/

Great link thanks. There doesn't appear to have been a time when the index hasn't sold off with the put/call ratio falling and down at these levels. Definately worth keeping a close eye on. I'm going to stay short until the trading range breaks to to the upside.

On a fundamentals point, I can see Geithner either coming back with more specifics/spondoolicks else the market will force it out of him. Will be interesting to see which happens first.

Edit: Upside breakout on the HUI and the barborous relic - see if it sticks!

Edited by Red Kharma
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