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IMF Aims to Restore Financial Market Confidence

July 7th, 2010

In its global growth forecast released today, the International Monetary Fund (IMF) raised its expectations for growth from its April forecast of 4.2 percent to 4.6 percent, noting that this was a reflection of stronger activity in the first two quarters of 2010, and was in anticipation of fiscal measures being put into place by authorities, particularly in Europe. The IMF expressed confidence that, despite the European debt crisis that continues to cause turbulence and increase potential risk, the forecast of 4.6 percent global economic growth is a realistic one.

The forecast growth of 4.3 percent for 2011 remains unchanged at this time for the global economy. However the IMF forecast for some individual countries for 2011 was adjusted, with Japan dropping from 2 percent to 1.8 percent, China falling from 9.9 percent to 9.6 percent, and Britain declining from 2.5 percent to 2.1 percent. China and India are expected to lead the pack in economic growth in Asia, which is forecast at 9.2 percent.

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Tags: Imf, Imf Aims

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CBOE Holdings Gets A Win, Dendreon Dancing

July 7th, 2010

The bulls used a lot of energy yesterday but have still managed to push the market higher after a couple of decent economic reports.  The gains have been limited to the upside, and as we go to press, the bulls seem to be getting tired.

Earlier this morning, the government reported initial jobless claims fell to 454,000 last week to their lowest levels since early May.  It was better than the 465,000 forecast by Wall Street and comes after a string of disappointing jobs reports. 

Retail stocks are mixed after reporting decent June sales numbers.  The International Council of Shopping Centers’ index of June retail sales rose 3%, but was at the low end of forecasts that ranged from 3%-4%.  Many of the retailers discounting heavily in order to bring customers in and luxury items aren’t moving.  Not a good sign.

As a result, the Dow is up 51 points to 10,069 while the S&P 500 is up 3 points to 1,063.  The Nasdaq is struggling to stay in the green but is up by a point to 2,160.

In breaking news…The Chicago Board Options Exchange (CBOE) won a huge high-stakes legal battle to maintain its exclusive rights to trade index-based options contracts.  CBOE Holdings (CBOE, $29.34, up $0.11), a recent IPO, touched a new low of $28.45 before rebounding on the good news. 

Dendreon (DNDN, $29.98, up $0.89) continues to work its way higher after touching a low of $25.78 yesterday.  We mentioned shares were coming under pressure and that a dip to $25 was in the cards.  Little did we know it would bounce hard off these levels which represented strong support.  Shares will likely stay volatile and we have the stock on our Watch List. 

We will be back in the morning with another update.  Subscribers, check for the updates in the Members Area. 

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How to Improve Your Trading by Not Having An Opinion

July 6th, 2010

It seems the more traders try to predict, the more it can’t be done. Just like we cannot predict future life events, we cannot predict future market events. The fantasy or “holy grail” that many traders believe is that we can predict the future of price activity. The reality is that we just cannot! Hopefully, I’m not bursting any bubbles out there, but better to hear it now than lose a ton of money later!

The greatest traders are those who realize this concept, accept it, believe it, and therefore trade based on the current reality in the market vs. the fantasy or market opinions, and always use stops and risk control. Great traders grasp the concept of risk and probabilities in trading. They also grasp the concept of money management, stop-loss setting, and simplification. In addition they understand that trading is both a science and an art!

If trading were just science, you could buy a mechanical trading system, start it, walk away, and come back and be rich. And if that system did exist, believe me, it would be so expensive that you and I could not afford to buy it; in fact it would probably be kept so secret that we would not know it exists!

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Wells Fargo, Wachovia Involved in Numerous Mexican Drug Laundering Schemes

July 6th, 2010

If you or I was involved in drug laundering of as little as 2 dollars and fifty cents we would be in prison.

Wachovia bank, now part of Wells Fargo via a merger, has laundered countless sums of Mexican cartel drug money and will get off with a slap of the wrist. The reason …Wells Fargo is too big to fail.

Please consider Banks Financing Mexico Gangs Admitted in Wells Fargo Deal

Just before sunset on April 10, 2006, a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City. As soldiers on the ground approached the plane, the crew tried to shoo them away, saying there was a dangerous oil leak. So the troops grew suspicious and searched the jet.

They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp.

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Tags: Drug Laundering, Laundering, Wells Fargo

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The Gold in My Backyard

July 5th, 2010

Here’s what the 50-year low in mortgages means to your wallet – and your sanity.

Many of you will travel great distances this long summer weekend, to visit hot sandy beaches and cool summer cabins in the mountains

I will not, but do not mourn for me.

I am quite pleased to spend the holiday on Seven Oaks Farm. It is my intention to tend to an outbuilding in dire need of scraping and painting. We have just had several old trees that fell over the winter ground to mulch, and I look forward to carting it up to the gardens.

Come Monday, we will head into the old village to drink lemonade, watch the parade in the morning and the local fire department’s fireworks come nightfall. With any luck, the chief will not ignite his overalls again this year.

But even if he does launch a rocket across the high school’s field (or perhaps especially then), it is all pure gold.

True Confessions

I didn’t always live on an old soybean farm in rural Maryland. I used to be… a New Yorker!

When I was a youngster back in the middle of the last century, we had a flat in New York City’s Greenwich Village. I

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No Bounce Yet

July 5th, 2010

Today sucked. My expectations were broken pretty much right away as the pattern did not play out as intended. Then very late in the day the market rallied off the lows and the indexes went green. Per the pattern that I am playing the bounce was actually too little of a move, so I’m glad the market closed red to maintain the conditions for a bounce.

Currently I’m down anywhere from 1-30% on various option positions due to vol crush. Surprisingly the Rydex funds lost very little. One trade that I cashed out with a gain of around 15% was QCOM. I took it off because it was pretty much the only green trade I had.

There was a shot to get out of all positions with nice gains very early when the market opened. My bias was to look for the open and go trade, so I wasn’t looking to take quick gains, I was looking to catch the big one. Unfortunately it didn’t happen…yet.

I don’t know if I’ve said it enough, but I’m bearish. The intermediate charts are very bearish. I’m playing for a very short term bounce.

At this point its a very risky trade and the next time I see these oversold conditions of this nature I am going to peel back and keep my position much smaller probably in the 30% range. These are very em

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