Griffin Account Talk

[hessian]

~11:20 AM - seeing losses being trimmed - seems there's buyers out there.... But will the buyers be able to bring the afternoon back to green?

 

[hessian]

Still gaining... buyers bringing us back! Hoping for Fedgolfer's play.

 

[Bullitt]

Hess,
Griff is a sharp player in this game. He knows what he's doing, selling into strength.

Griff,
Double top confirmation on the brink? Still in the back of my mind.

 

[fedgolfer]

Hess,
selling into strength.

But if Grif is not anticipating an afternoon rally, then he's selling into weakness, if he's going to the F fund for tomorrow. Just my opinion and best of luck to us all

I agree w/ y'all on the potential double top... institutional money left the Dow on that spinning top doji according to worden bros. software (balance of power indicator, tracking blocks greater the 10,000 shares a trade on the Dow ETF, DIA).

 

[Griffin]

Hess,
Griff is a sharp player in this game. He knows what he's doing, selling into strength.

Griff,
Double top confirmation on the brink? Still in the back of my mind.

Thanks for the moral support, I want to see a significant move lower before i say we have confirmation - but I definitely don't want to wait that long if that's where we are headed.

I'm actually a bit relieved that we are seeing some buying - and the previous channel was unsustainable so it was going to be broken at some point - doesn't mean that we will reverse into a bear market. However, the risk of this thing going south seems to be increasing. The buying were getting is certainly nice given that I want to exit the market today - but it doesn't strike me as a dip buying herd, yet.

Again, I am concerned about this bank plan and Ben's comments last night. It seems odd given the fundamentals.

 

[hessian]

Hello Griff,
Wow, had some fun today, huh? Lobbed a couple shots from left field before noon just to stir responses/feedback. Interesting replys - basically I decided to stay in stocks - no one person's advice, rather collective of varied opinions that I respect. Divot was one that's been saying for awhile "don't freak out" re: healthy retracement is possible. Tonight I think everyone's wondering where we're headed tomorrow, next week, & beyond (personally I'm trying to ignore the TV news/media bluster).

Your pondery of Ben's comments last night got me thinking - why'd he do that? Your earlier response impressed on me that he's very competent and knows precisely what he's doing - so could his comments have been intended to have some desired effect. I've heard others opine that his comments are what killed to todays rally. 12% posed tomorrow may be a comeback. Futures tonight have been holding positive (->8:30 pm) .

Ok, so here's reason for alll above - a theory: I got from Birch that the trend channel since the August bottom has been at 45 degrees - indicating strong bullish trend (actually looks more like 60 degree to me!), but point is, everyone seems to believe that slope isn't sustainable, and eventually needed to change. I'm thinking this could be a correction to accomplish a lower slope channel (parabolic was term Birch said he was looking for) - and maybe/wondering - could Ben's comments been intentional, desiring to slow the market's unsustainable pace - before it went any further? Curious, I drew a trendline from the bottom after the 50/50 cut thru today's 1538 mark (S&P), then an upper channel from the last top, parallel to the new lower.

I realize this is a real long-shot [and only a a rookie could get away with posing such an outrageous theory!] For a new channel to form, we eventually need to have a move past the previous top - then no "double top", right? - it would just be a new top!

 

[benitocj]

My little number crunching pointed to a down trend for today also (that is for the I fund). My analysis shows an up trend for tomorrow, and then down for the rest of the week, but honestly, I wonder if my model holds true or not. I guess will see in a few days, eh?

 

[Griffin]

Hessian

When Birch talks about slopes changing and he uses the term parabolic - he does not mean a natural log type slope, what he means is exponantial growth. I can't tell from your response if that is what you interpreted or not - eitherway, I will not speculate about Birch's intentions - but I will speculate about Ben's.

As I've said before, Ben is never going to purposefully attempt to slow the economic growth - it's his only weapon against the spending - and yesterday's warning may have been a signal to wall street and washington that you can't have it both ways.

Ben gets this little elixir of declining dollar + rising oil means the rest of the world continues to buy oil at roughly the same price, but US manufacturing costs go up and exports are going to be cheaper - i.e. America is having a blue light special (lots of products at a thinner profit margin). Which means we better sell like there's no tomorrow if we are going to stay relatively profitable and fight inflation.

Which brings me back to the comment I made earlier about too much optimism being built into the current prices. Tomorrow is going to be a dirty little secret tell all, put up or shut up kind of day. With three important techs all reporting slightly better then expectations - were going to see if that optimism was excessive. Tomorrow will come out of the gate just fine - it' whats happening by 1030 that will tell the tale.

Did you notice Asia and Australia aren't splitting any Pinatas?

Can't speak to your chart (use big charts and paint to make your graph - it's real simple), but I can say that if tomorrow is green all day - that would give us a reason to relook at the current channel. I certainly would be willing to miss some returns to keep from slipping further and to see a more horizontal channel develop. I've said that when it's steep up - you can't time it - but sideways would be nice - and unfortunately "no" to your last question - we don't need a new top to form a new channel - at least not one with a negative slope. Will cross that bridge tomorrow.

 

[hessian]

Hey Griffin,
Thanks so much again. Asking questions, is the the only way I know to learn in short order (not being an economist, or having the backgroud). I realize the depth of understanding that you and others have. Learning fast though. Very much appreciate your taking the time to respond and for the advice!
VR

 

[Griffin]

Hey Griffin,
Thanks so much again. Asking questions, is the the only way I know to learn in short order (not being an economist, or having the backgroud). I realize the depth of understanding that you and others have. Learning fast though. Very much appreciate your taking the time to respond and for the advice!
VR

This is a peer board, I'm not an economist either, but I do have a background in analyzing data but for the most part, I'm just a news junkie. I highly recommend doing some real reading and I do recommend Jim Cramer - I learned a lot from Real Money. I Also recommend Bulkowski's Getting started in chart patterns.

 

[Griffin]

After lagging through the night, the pre-market really picked up - looking like it is going to deliver an explosive open - haven't figured what triggered that quick rise - my guess is Coke and JP Morgan along with United Tech - but CPI just came out .3 across the board -

Again as Ben is warning wall street and washington - you can't have it both ways.

 

[Steadygain]

It may simply be that the overwhelmingly majority are determined to push the Markets to record heights and most of what we see now is based on the seasonality of high gains in Nov/Dec. In the past when I've looked for a real solid basis for rapid steady gains - it could not be found.

 

[Griffin]

It may simply be that the overwhelmingly majority are determined to push the Markets to record heights and most of what we see now is based on the seasonality of high gains in Nov/Dec. In the past when I've looked for a real solid basis for rapid steady gains - it could not be found.

Well, the market is always forward looking - so by time the basis for any action is "solid" it's long since been old news. I agree with you seasonality comment, we are in the season to begin the holiday run.

"Buy the rumor - sell the news"

Rumors to buy -
The holiday season (three words - lots of fuel)
The greater then expectations 3Q earnings
Big Bank subprime bailout (is this a positive?)

News to sell -
3Q earnings are only slightly better the expections and it is fairly limited to Technology (have you heard the quiet tech bubble hypothesis?)
The housing market continues to decline
The Fed chairs warning (this one has me a bit baffled)

PS - when I did an IFT yesterday, they faxed me my last quarter statement containing my account number - so now I can afford to wait until closer to 1130 to make my call for tomorrow.

I am considering getting back in, but that Beige book is coming at 2:00 pm and I have to believe that it contains the basis of Ben's warning.

 

[Griffin]

It is starting to look very unlikely that I will be moving back into stocks today. I am quite happy with my position in the F-fund and it appears that there is more downside to the TNX in the works (Inverse relationship with the F-fund).

 

[Griffin]

This is what I was concerned about - that broke me out of my B&H strategy

View attachment 2312

From the chart you can see that there is some solid support at 1520 - but beyond that is a move to the 50 dma takes to 1500.

The technicals are throwing sell signals like mad.

 

[Griffin]

Fed Beige Book intro

Anecdotal reports from the Federal Reserve Banks suggest economic activity continued to expand in all Districts in September and early October but the pace of growth decelerated since August. Growth was similar to that observed in the last Beige Book in seven Districts--Atlanta, Boston, Chicago, Minneapolis, New York, Philadelphia and St. Louis. The economy grew at a slower rate in five Districts--Cleveland, Dallas, Kansas City, Richmond and San Francisco. The expansion was variously characterized as "moderate," "modest" and "mixed."
Consumer spending expanded, but reports were uneven and suggest growth was slower in September and early October than in August. The manufacturing and service sectors continued to expand, but growth weakened--mostly for products and services related to home construction and real estate transactions. Several manufacturing and service firms reported that weaker domestic demand was offset by strong sales to global markets.
Residential real estate markets continued to weaken, and most Districts reported additional declines in home sales, prices and construction. Financial institutions reported an increase in delinquencies and slight deterioration in credit quality. Lenders in many Districts tightened credit standards, particularly for real estate. The majority of reports indicated an increase in business lending but a decline or slower growth in consumer lending.
Activity in the energy industry is still robust but growth has slowed. Favorable agricultural conditions are contributing to a bumper crop throughout much of the country, but drought continues to hamper production in the southeast.
Contacts in a number of industries indicated a higher-than-usual degree of uncertainty about the outlook for economic activity. Many real estate contacts expect housing markets to remain subdued for several months. At firms without direct ties to real estate and construction, contacts are still wary that credit tightening and slowing construction might slow activity in their industry, but there is cautious optimism because few see much evidence of such spillovers at this time.
Job growth eased in some regions, but labor shortages were reported for many occupations in most Districts and are said to be restraining economic activity in some instances. Wages rose moderately except for workers in short supply, where sharp increases were reported for some positions. Upward pressure on input costs are reported in most Districts, but competitive pressures are restraining the ability to pass higher input costs to selling prices in many instances.

Well there it is, this is what Ben was warning about - slowing growth in a blue light America.

 

[fedgolfer]

Grif, your F call looks to be a great call for today. Congrats. Let's hope TSP gives you the full AGG gain... and then some

 

[Griffin]

Grif, your F call looks to be a great call for today. Congrats. Let's hope TSP gives you the full AGG gain... and then some

Thanks, I didn't lock it in though, so hopefully I don't have to give it back.

So what do you all think of that close?

The negative trending intraday channel remains intact (but were high in the saddle) so do we continue lower or our do we get follow through on the close and see the dip buyers materialize.

After today, I'm wondering why the dip buyers would step in? - is there any reason to expect growth that would justify extending the P/E ratios significantly. Do you buy because you can? and hope for a retest of the high's and another session of profit taking.

This is starting to sound like the perfect timing scenario - we have a nice mix of developing issues and no where to really go.

It's time to time!

 

[fedgolfer]

Why is there no growth? I thought growth has just slowed and is the main concern of the Fed now, even over inflation? Our multinat'l companies are still seeing strong overseas growth. Do I have that wrong? Anyway, XLF is sitting on it 50 day SMA, most of them gained ground after 2pm (even Citigroup closed strong, & GS, etc) -- but they're definitely still in bearish patterns. I don't think we'll break the recent highs, or much less this 5-day downtrend if financials don't go up w/ tech... so i'm keeping a close eye on XLF tomorrow and it's relation to the 50 day SMA.

S&P is sitting on its 20 day SMA with a spinning top doji, kinda looks like 9/10 all over again -- we turned on a dime and rallied from there -- with anticipation of a rate hike (kinda similar to where we are now).

Today was volatile, tech leaders still look strong and closed very well... but volume would suggest it was retail and still not big institutional buyers. I guess i'm just saying that even though it looks ugly, I'm staying in until the pattern breaks... it hasn't fully yet in my eyes, but pretty darn close. I know you want to buy back in at the 50 day in the S&P... but i'm invested already... so I could be clouded by hope!!!

 

[airlift]

Paladin,
I just got back from work. Thanks for your analysis regarding the positive outside day. At work I don't have access to charts. Thanks again!