March 31, 2010 in Uncategorized
Jozi, Jozi. We closed at the worst point of the day. For equity markets that was. You get the sense that the long weekend might be pulling and tugging at the bulls efforts. If it were not for the pending “jobs number” on Friday, it might be a different matter. With the precursor always the ADP data, which is out today. Just a reminder of course the fellows at ADP are a listed payroll administrator. So they aggregate all of their data, a lot it must be said, and give an indication of what the jobs number should look like Friday. The ADP has folks with estimates, could you believe. If the big number Friday was not enough. Expect somewhere around 40 thousand jobs for the month of March. On the last day of March? Excellent, that smells like fresh data to me.
Maude Street meanders. BHP Billiton was out the blocks quickly on the new iron ore pricing structure which seems to favour them and the other big producers, Rio Tinto and daddy long legs Vale. Pronounced Vah-lay and not Vail. Session end retail stocks were the biggest laggards, unimpressive credit extension data again. Platinum stocks were the biggest winners amongst the majors, you can’t really count Oil and Gas as a whole sector can you? Sasol and an Oando secondary listing. Oando, a stock that trades less than 100 thousand Rands a day. Session end the Jozi all share closed at 28706, up 29 points. At one point within 100 points of 29 thousand.
Wow, the iron ore and steel saga that makes “the bold” look tame. ArcelorMittal have turned around, like I thought they would, and said to their clients, sorry, because we no longer get some of our iron ore at cost plus three percent we have to charge you a whole lot more. Sorry. Wow. As you can imagine government is outraged here and when I heard the news I turned to Paul and said this seems like a Pioneer type situation here. What would you do if you were in their shoes? You basically got your health insurance for free, but now have to pay through the nose, pass that cost on? Yech. I suspect government won’t let the new pricing fly. Ointment? Fly?
Greeksh debtsh. My mother read my piece yesterday and answered my questions would you believe: Omologo 10 Eton. Would mean I guess, equivalent to 10 Eton. I guess Eton is the greek cent? Thanks mom. Bloomberg on the auction yesterday: Greek Seven-Year Notes Drop; Demand Wanes at ‘Surprise’ Auction. This is the first sign that there are more than doubters out there. Nothing to do with speculators George, if you are curious. Nobody wants your debt, they don’t trust you. As a consequence the ten year was sold off, now yielding 6.47 percent. Creak.
How about a Guinness and …… a home loan? Wow. It is a mess, Irish banks underwent their own stress tests and are now firmly in the eye of the PIIGS. And who is going to pay for it? The tax payers of course. Before you get outraged remember that some tax payers went hog wild in the property go-go days of the middle part of this decade. Irish politicians are outraged. Hey chaps, were you not in charge and trumpeting the brave new Irish economy? It even had a name, the Celtic or Gaelic Tiger. Check how shocked and horrified everyone is, Bloomberg: Irish Banks Need $43 Billion on ‘Appalling’ Lending.
Having said all that, the Bank of Ireland ADR’s in New York were up nearly twenty percent yesterday. Sadly on the other side of the equation, a slightly smaller operator, Allied Irish Banks were down over eight percent. Sees. Mixed bag of course, not all banks are in a bad space, some can raise the funds required without breaking a sweat, others, deep discount share issuances.
Staying with this “trading theme” that I have been going on about over the last few days. I think largely raised by the New York Times article last week Friday. Here it is, if you did not get a chance. Again, some very long reading, but worth it, because it speaks to our style which is your style: Day Traders 2.0: Wired, Angry and Loving It. Check it out, as Randy Jackson would say, he might throw in dog there, but that is more a term of endearment rather than the literal dog. I love my dog, even though she wants to escape every time I open the front door.
As you can imagine people in the trader world have been picking this apart. As with the Business Insider, I am just more interested that the day trader is back, because this tells me all I need to know. This time however it IS different. Information is readily available, there are alternative trading instruments like StockTwits that exist. I think that the biggest mistake that folks make is pattern recognition which we are all hard wired to pick up. As a kid learning to talk, math at school, driving, all about patterns. For instance, this is not a tree, but rather a map of the transport systems in Seoul.
Remember that the overall market moves sharply, one way or another and if as a day trader you get it right for a while then I suspect that you think you might have some sort of feel for it. Here is what I think a good response to the story, from a place that I guess covers both trading and investing: Distinguishing Between Professional and Amateur Day Trading. Emotion out of it? Never I think, the trading robots that supposedly can pick up trends that have been programmed by people to understand trends. People trends.
OK, What does Buffett, the dude who has made more money participating in markets, have to say about this? This makes a lot of sense to me, what does it mean for you? Quote:
- The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.
New York, New York. A choppy session again, typical when we are in this pre jobs data zone really. First up half a percent, then down one quarter of a percent and ending about flat really, the broader market slightly lower. No real leaders, no real loser, a day that trader types hate I guess. Housing data earlier in the session in the form of Case Shiller home pricing kind of confirmed that house prices have bottomed. Minus 0.7 percent on the whole index, versus a consensus of minus one percent. The only thing with a minus in front of it that I like is cost cutting. That is the only minus that I like. Consumer confidence also rebounded for the month of March, and beating expectations that was “good” news. Good as in nice.
Wall Street wanders. Session end the Dow Jones industrial average had pancaked, up 11 to 10907. At the best level of the day the index was at 10940. The broader market S&P 500 with an even thinner mix, down a fraction, 0.05 points to 1173. The nerds of NASDAQ managed a quarter of a percent gain, 6.33 better to 2410. Yields on the ten year, 3.87 percent.
Commodities, currencies, Drs. Copper and bushveld, pass me the telescope. The oil price, 82.52 Dollars per barrel. The gold price 1108 Dollars per fine ounce. The bush doctor platinum price last at 1642 Dollars per fine ounce, that seems to be on a tear. Dr. Copper, the other more trustworthy doctor at 352 US cents per pound. The Rand last at 7.30 to the US Dollar, 9.84 to the Euro and 11.06 to the Pound Sterling. Pass me the telescope. OK, looking, a bit misty, should be, wait, flat. ADP, can see that on the horizon, that should provide some action later.