Monday, February 28, 2011

The Russian Central Bank unexpectedly raises its key interest rate

The Russian Central Bank unexpectedly raised its key interest rate by 0.25 percent to 8 percent for the first time since the economic crisis over two years ago.
The Bank of Russia said in a statement that the rate hike, effective from Monday, was needed due to the high inflationary pressure and the expected rise of capital inflow into Russia as the world oil prices surge on the unrest in the Middle East.


Below are two charts of the VIX that show the general view. Given the weekly chart it looks like we are competing our diagonals and that is also reiterated on the daily chart. There are a few options for support and we are currently sitting on one of them.

Another look at the Banks...

As I like to occasionally look at things from the reverse point of are some interesting charts of the bank index. The last few days have been less than impressive for them banks. Additionally, the inverted BKX index makes a reasonably bullish chart with its rather pretty bull flag pattern that is emerging...which, by the way, looks like it wants to make a move imminently.

Just as a note there was quite a bit of professional selling into the last hour and the close...perhaps we will not be getting our trusty reliable super duper 1st of the month "BUY" day afterall...last I checked EVERYONE was expecting one.

Below you can see the tendency toward weakness in the BKX index...and especially on this rebound. At least on a window dressing day, I would think that the banks could get their own stocks window dressed...but not today.

The dollar index...

While everyone is currently watching their lower trend lines break without an accelerated price decline and is wondering what is going on...they may be looking at the wrong trend line...

If ever there is a view that things are not what they seem, the following headline captures it:

Simon Black: "The Market Is Telling Us That The Dollar Is Finished"Submitted by Tyler Durden on 02/28/2011 12:46 -0500
There’s major shift occurring right now in financial markets. Sure, the food and freedom riots that are spreading across the globe are a major indicator that civil unrest follows very closely behind resource shortages and economic turmoil… but there’s something else that I’ve noticed recently– it’s a sea change in the financial system. In the past, major crises normally caused investors to seek safe haven assets, and everything else equal, the dollar would rise. They call it a ‘flight to safety’, and investors would flock towards the perceived stability of US Treasury securities. Fast forward to today. Mubarak. Gaddafi. Khalifa. Al Said. Ben Ali. Etc. There is no shortage of turmoil right now… yet we are seeing the dollar get clobbered while gold, silver, and smaller currencies like the Swiss franc rise. This represents a major shift in the way that the market views risk. Ironically, this makes precious metals among the most attractive safe haven alternatives– the fact that they have no real functional value is a net positive. In other words, $20 wheat means blood in the streets. $2,000 gold only makes for pithy headlines, and its significance is easily dismissed when highly regarded sages like Warren Buffet dispute the notion of holding precious metals (nevermind he bought oodles of silver in the late 90s).
The funny thing is that Tyler, and some of his whacky extremist metals/commodity bulls/dollar bears and are totally possessed with their dollar collapse, gold to $12,000 and silver to $500. I hate to say it but promoting silver coins sold on retail webites is a sign of a top...especially you can get enough emotion going to get a smart guy like Tyler pyched to do it.
The reality is the dollar is likely to ruin all their best laid plans...

Sunday, February 27, 2011

EU - Eurozone is dead

The Irish have voted and its funny how one little wrinkle in a ponzi scheme can bring it down even if the wrinkle comes from a little heretofore non-descript and fairly insignificant participant. The Irish have voted and, in my opinion, they should and they will pull an "Iceland". The EURO zone has no right to their future, their constitution or their assets and I doubt that the Irish will willingly give those things to them.

The side effects of Ireland will be Portugal, Spain, Greece, Turkey and a host of bankrupt (or nearly so) eastern block countries deciding that not to throw good money after bad...they will default on the invasive, corrupt and manipulative machinations of the EU. A debt money system run by power and greed and watched over closely by the many quasi official institutions that support the EU's efforts to homoginze and hold beholden its member states including and rather interestingly the Fed.

Good luck attempting to override this referendum Mr. Barosso and Van Rompuy. Now what?

David McWilliams, an economist and former official at the Ireland's Central Bank, has led calls for a popular vote under Article 27 of the Irish constitution, which requires on a matter of "such national importance that the will of the people ought to be ascertained".
"We have to re-negotiate everything," he said. "Obviously, the first way to do this is to make them aware that if they force us to pay everything, we will default and they will get nothing. So they had better get a little bit of something, than all of nothing. To make this financial pill easier to swallow, we must take the initiative politically. We can do this via a referendum.

"If the Irish people hold a referendum on the bank debts now, we can go to the EU with a mandate from the people which says No. This will allow our politicians to play hard-ball, because to do otherwise would be an anti-democratic endgame."

Declan Ganley, the Irish businessman who led the 2008 No vote to the Lisbon Treaty, said Ireland must "have the balls" to threaten debt default and withdrawal from the single currency.

"We have a hostage, it is called the euro," he said. "The euro is insolvent. The only question is whether Ireland should be sacrificed to keep the Ponzi scheme going. We have to have a Plan B to the misnamed bailout, which is to go back to the Irish Punt."

Saturday, February 26, 2011

Fraud on a massive scale - the deception of the Banks, Washington and Obama

Why are the only people going to jail NOT members of the financial and government elite...Jullian Assange for example...We should be prosecuting Ben BURNanke, Tim G-heist-ner and the criminals at Bank of America to name just a few.

The irony of our times, is that to get real and quality news jouranlisim on television you have to go to the Comedy Channel, Aljazeera and Russian Television in the US before CBS, CNBS, MSNBC, Fox News or CNN.

The Colbert ReportMon - Thurs 11:30pm / 10:30c
Corporate Hacker Tries to Take Down WikiLeaks
Colbert Report Full EpisodesPolitical Humor & Satire BlogVideo Archive
The Colbert ReportMon - Thurs 11:30pm / 10:30c
Corporate Hacker Tries to Take Down WikiLeaks - Glenn Greenwald
Colbert Report Full EpisodesPolitical Humor & Satire BlogVideo Archive

Austan Goolsbee - a goon who does not get it and Administration that does not know we know they don't get it. I can't believe that they let this guy out of the basement.
The Daily Show With Jon StewartMon - Thurs 11p / 10c
Austan Goolsbee
Daily Show Full EpisodesPolitical Humor & Satire BlogThe Daily Show on Facebook

Hard to believe that Rumsfeld forget most of what he ever said and is now trying to rewrite history...Jon does an amazing job with this interview and Donald Rumsfeld is clearly not comfortable but he will do anything to whore for a few bucks
The Daily Show With Jon StewartMon - Thurs 11p / 10c
Exclusive - Donald Rumsfeld Extended Interview Pt. 1
Daily Show Full EpisodesPolitical Humor & Satire BlogThe Daily Show on Facebook
The Daily Show With Jon StewartMon - Thurs 11p / 10c
Exclusive - Donald Rumsfeld Extended Interview Pt. 2
Daily Show Full EpisodesPolitical Humor & Satire BlogThe Daily Show on Facebook
The Daily Show With Jon StewartMon - Thurs 11p / 10c
Exclusive - Donald Rumsfeld Extended Interview Pt. 3
Daily Show Full EpisodesPolitical Humor & Satire BlogThe Daily Show on Facebook

Russell 2000 setting up out of expanding wedge

Revisiting Apple...

So far the nasdaq 100 has been showing relative weakness versus the Nasdaq as a whole and AAPL in particular has been showing relative weakness versus the 100. This could be a sign of vulnerable market and certainly puts the bounce so far on shaky ground. Based on the window dressing and still unfilled gap at 350 on this chart I would think we get more testing and a continue to attempt a fill of the lower gap on Monday followed by selling into the close of the day and month if upside momentum does not get some volume behind it.

Friday, February 25, 2011

Some thoughts on the Financials...

I will be posting some more detailled views of the markets, especially this bounce, this weekend. One thing I would like to send people into the weekend thinking about is financials. All the big financials had unhealthy action today in addition to not closing at the highs as the major indexes did. It was not good. WFC, C, JPM, BAC, AIG, GS...and a host of others all posted bearish chart patterns that look like they are going to resolve soon...start doing some research...additionally this pennant looks like a continuation pattern...its about to get interesting by the looks of things.

Additionally, the transports did not have an especially strong day either...

Have a great weekend.

Testing, Testing, Testing...this is NOT a drill.

Some little thoughts for tomorrow...

Everyone and their brother, mother and grand-mother has been watching the "incredible, death defying VIX 2-Sigma buy signal". I would like to point out that this market has had a way of fooling many commonly accepted interpretations of signals such as Hindenburg, the VIX, Put/Call and Bullish percent signals. While it would be nice to see this a signal actually work for a change, the past VIX signals have been less than spectacular and stand a very good chance of continuing to be unpredictable or unreliable.

Additionally, I prefer to use log charts and on log charts all the bearish wedges have broken out to the downside as you can see from my SP500 chart posted earlier this week. As a recommendation, I would consider setting up charts in both Linear and Log Scaling for any index that you may be analysing as this will clue you into what the markets are seeing more as a whole. Some people prefer the linear charts some the Log charts. Its good to be aware of both.

I am posting these comments, as there are considerable cross winds in the markets here.

Here's a look at the wedge target os a rather sloppy pattern on the ES 24 hours globex futures contract. Keep in mind that this patten only appears on the futures contract...the cash market does not reflect this pattern at all. But sometimes this is somewhat useful to setup target ranges...

Here's a look at another pattern that is much better and also the rage lately with all the conflicted market action and internal dissonances...the Megaphone or expanding bearish wedge...

Thursday, February 24, 2011

Former leaders are cracking...lets look at Apple

Polyphenols, Hormesis and Disease: Part II

In the last post, I explained that the body treats polyphenols as potentially harmful foreign chemicals, or "xenobiotics". How can we reconcile this with the growing evidence that at least a subset of polyphenols have health benefits?

Clues from Ionizing Radiation

One of the more curious things that has been reported in the scientific literature is that although high-dose ionizing radiation (such as X-rays) is clearly harmful, leading to cancer, premature aging and other problems, under some conditions low-dose ionizing radiation can actually decrease cancer risk and increase resistance to other stressors (1, 2, 3, 4, 5). It does so by triggering a protective cellular response, increasing cellular defenses out of proportion to the minor threat posed by the radiation itself. The ability of mild stressors to increase stress resistance is called "hormesis." Exercise is a common example. I've written about this phenomenon in the past (6).

The Case of Resveratrol

Resveratrol is perhaps the most widely known polyphenol, available in supplement stores nationwide. It's seen a lot of hype, being hailed as a "calorie restriction mimetic" and the reason for the "French paradox."* But there is quite a large body of evidence suggesting that resveratrol functions in the same manner as low-dose ionizing radiation and other bioactive polyphenols: by acting as a mild toxin that triggers a hormetic response (7). Just as in the case of radiation, high doses of resveratrol are harmful rather than helpful. This has obvious implications for the supplementation of resveratrol and other polyphenols. A recent review article on polyphenols stated that while dietary polyphenols may be protective, "high-dose fortified foods or dietary supplements are of unproven efficacy and possibly harmful" (8).

The Cellular Response to Oxidants

Although it may not be obvious, radiation and polyphenols activate a cellular response that is similar in many ways. Both activate the transcription factor Nrf2, which activates genes that are involved in detoxification of chemicals and antioxidant defense**(9, 10, 11, 12). This is thought to be due to the fact that polyphenols, just like radiation, may temporarily increase the level of oxidative stress inside cells. Here's a quote from the polyphenol review article quoted above (13):
We have found that [polyphenols] are potentially far more than 'just antioxidants', but that they are probably insignificant players as 'conventional' antioxidants. They appear, under most circumstances, to be just the opposite, i.e. prooxidants, that nevertheless appear to contribute strongly to protection from oxidative stress by inducing cellular endogenous enzymic protective mechanisms. They appear to be able to regulate not only antioxidant gene transcription but also numerous aspects of intracellular signaling cascades involved in the regulation of cell growth, inflammation and many other processes.
It's worth noting that this is essentially the opposite of what you'll hear on the evening news, that polyphenols are direct antioxidants. The scientific cutting edge has largely discarded that hypothesis, but the mainstream has not yet caught on.

Nrf2 is one of the main pathways by which polyphenols increase stress resistance and antioxidant defenses, including the key cellular antioxidant glutathione (14). Nrf2 activity is correlated with longevity across species (15). Inducing Nrf2 activity via polyphenols or by other means substantially reduces the risk of common lifestyle disorders in animal models, including cardiovascular disease, diabetes and cancer (16, 17, 18), although Nrf2 isn't necessarily the only mechanism. The human evidence is broadly consistent with the studies in animals, although not as well developed.

One of the most interesting effects of hormesis is that exposure to one stressor can increase resistance to other stressors. For example, long-term consumption of high-polyphenol chocolate increases sunburn resistance in humans, implying that it induces a hormetic response in skin (19). Polyphenol-rich foods such as green tea reduce sunburn and skin cancer development in animals (20, 21).

Chris Masterjohn first introduced me to Nrf2 and the idea that polyphenols act through hormesis. Chris studies the effects of green tea on health, which seem to be mediated by polyphenols.

A Second Mechanism

There is a place in the body where polyphenols are concentrated enough to be direct antioxidants: in the digestive tract after consuming polyphenol-rich foods. Digestion is a chemically harsh process that readily oxidizes ingested substances such as polyunsaturated fats (22). Oxidized fat is neither healthy when it's formed in the deep fryer, nor when it's formed in the digestive tract (23, 24). Eating polyphenol-rich foods effectively prevents these fats from being oxidized during digestion (25). One consequence of this appears to be better absorption and assimilation of the exceptionally fragile omega-3 polyunsaturated fatty acids (26).

What does it all Mean?

I think that overall, the evidence suggests that polyphenol-rich foods are healthy in moderation, and eating them on a regular basis is generally a good idea. Certain other plant chemicals, such as suforaphane found in cruciferous vegetables, and allicin found in garlic, exhibit similar effects and may also act by hormesis (27). Some of the best-studied polyphenol-rich foods are tea (particularly green tea), blueberries, extra-virgin olive oil, red wine, citrus fruits, hibiscus tea, soy, dark chocolate, coffee, turmeric and other herbs and spices, and a number of traditional medicinal herbs. A good rule of thumb is to "eat the rainbow", choosing foods with a variety of colors.

Supplementing with polyphenols and other plant chemicals in amounts that would not be achievable by eating food is probably not a good idea.

* The "paradox" whereby the French eat a diet rich in saturated fat, yet have a low heart attack risk compared to other affluent Western nations.

** Genes containing an antioxidant response element (ARE) in the promoter region. ARE is also sometimes called the electrophile response element (EpRE).

Wedges and supports broken...time for retest...

Wednesday, February 23, 2011

This ISN'T working...

A view of the S&P500...

Its funny, post history everyone will want to blame a sell off in the markets on Libya. The reality is that the Mr. Market has a mind of his own that is very difficult to understand. Sometimes he wants to go up when there is only bad news and even while Egypt wants to rebel and put at risk the largest oil stores in the world and sometimes he wants to go down when a little country with a relatively small amount of Oil contributed to the world oil markets is also falling into revolution. The reality, is that the markets were going to go down regardless of Libya and seemed to want to go up regardless of the any reasonable analysis of Benny BURNake and the Ink Jets, the Banks, the manipulated data or the vast amount of unemployment. Below is an example of why...a 35 year trend line can do the trick especially when combined with a 75% retracement from the highs.

Airstream Life Magazine Spring 2011

I am thrilled to have my photographs included in the Spring 2011 edition of Airstream Life Magazine, including the cover!  As I traveled the country, I was fortunate enough to meet so many amazing people and on Labor Day weekend, Max and I headed to upstate New York to gather with Westy owners for their annual Westyfest event.  The cover photograph was a candid moment between Tim Frazier, his wife Margaret and their dog, Lucy in front of their Westy.

Inside, there are more photographs from the event including Zach and Deb Wood's son Zane.  I just love Zane and he is a joy to photograph.  When I first arrived, I was able to take a portrait of friends Peter, Dick, Bill and Juju.  Bill owns the property that everyone camped on and even offered Max and I our own Westy to stay in while we were there.  We accepted and fell in love with this way of camping.  I love my tent but have to say that the Westy is easy to fall in love with.

There is also another article on Robert Ramirez's Pin Up Hair design and his Airstream.  I met Robert when I went to the Johnny Cash festival last year and took photographs of all of the pin ups and festivities. I was immediately drawn to his airstream and business.

A huge thank you to Rich Luhr for the opportunity!

The Dollar the REAL story...not this dollar collapse scam...

Click on charts for a more detailled view.
For more information please read this post: Dollar Scenario

Monday, February 21, 2011

Oil to $200...really?

On the chart I refer to a breakout of -82. That really means a breakdown below 82 in real life - could be rather bearish for oil. That's the inverted interpration based of the chart and in polarity with the real market. This is a very high level view of Oil and it is likely that we test this pattern (the lower trendline) before breaking out. Contrary to popular expectaton, the breakout will likely be in the direction of long-term and substantially lower Oil prices after a test of 110 or so in the CL market.

Date Shakes In Indio

I spent the weekend with some friends in the desert and if you like dirt, cactus, golf and the's the place to be!  Indio is known for dates and Shields is the place to go for the their world famous date shake.

We stopped there on the way out to sample some dates and partake in what many say is the best date shake in the world.  Most stopping by are tourists looking for a sugar rush and to sample some of the many varieties of dates.  One couple I talked to at the counter live in Colorado and they make it a point to stop by Shields just to continue their tradition of drinking a shake every time they come to California.

I sampled several dates and the shake.  Delicious!  I haven't had a date shake in the desert since I was a little kid and it was just as I remembered.  If you are in the Indio area, it's a stop not to miss!

Key Pattern on SP500 Breaks

Sunday, February 20, 2011

The Presidents Day Effect

I hope everyone is having an enjoyable President's Day is an interesting reference point for the market. Usually, if the market has been able to rally into President's day, especially closing near the highs...that's a marginally bullish sign for the outcome of the year. However, this time around things are a little more interesting. First of all, we are trading on abysmal volume (potentially the lowest monthly volume in 5 years)  at EXTREMELY stretched prices...and second during EXTREMELY unpredictable times.

In the past history, when we have traded this strongly into this time of year that has bode well for the rest of the year...except when we do so on paltry volume and over extended both of those 1937 and in 1931...the results were spectacular and resulted in over 40% declines for both years. The average return for entire year in which we trade into Presidents day strongly is 14.46%. We are currently up 7% for the year...that leaves us a potential, if the internals for the market were strong, of another 7% gain by the end of the year...or alternatively the potential of a 55% decline, as in 1931, if the market internals are a masquerade.

Here is a chart...

Saturday, February 19, 2011

Nasdaq 100 chart revisited

I am re-posting in this blog entry (not inspired by Steven Colbert Colbuffington Re-post) with additional markups on the chart and comments because some people seemed to not understand that the significance or my the markings on the chart. The two red trendlines are exactly the same number of points. This indicates a classical type of market symmetry in that the bounce from 2003 is almost exactly equal to the bounce from the 2008 low...additionally, there is minor but not insignificant time symmetry also which is indicated by the comparison at the top of the chart. Markets love to behave symmetrically and this one on the Nasdaq 100 is a very strong pattern indeed.

I will be posting a few new charts and observations tomorrow...

Thursday, February 17, 2011

TF Daily Swing System Adds another entry short

TF Daily Swing adds another entry short for a 12mm allocation pool...

Photographs Published in Trailer Life Magazine March 2011

"We have more fun than anyone" is the motto of the group, Sisters on the Fly.  I found out about this group a few years ago and decided that since I had a teardrop trailer, it would be a good idea to join them to meet other women who love to camp.  I joined and went on a few outings with the Sisters in Arizona and Sisters in Califonia.  Indeed, they do have a lot of fun.

There is a bond between these sisters that is as tight as family, or sometimes even more so.  I'm always up to join and support groups that empower women to do what many are afraid to do, like towing your own trailer or ditching the husband and kids at home to get out on your own.

A few of the photographs I took of these wonderful ladies have been published in the March 2011 edition of Trailer Life Magazine in an article written by Becky Blanton.

Thank you ladies for the great time!  I hope to see you again down the road.

SP500 Initial Cracks

Dollar and AAPL retracements


Wednesday, February 16, 2011

Nasdaq 100 - symmetry

Utilities - worth a close watch

Painted Max

On Halloween, Max wanted me to enter his photo in a costume contest that painter, Kellie Straw was having on her facebook fan page.  He dressed up as a fisherman.  You can see the photo HERE.

Max and I were so thrilled to learn that he won!  For a prize, Kellie painted Max doing his favorite thing...having fun at the beach.  She painted his portrait using a photograph I took of Max on the beach in Cape Cod last year with the wind in his face.

I love her work and I love this painted portrait of Max!  She even has note cards available of this painting HERE.

Thank you Kellie!