Griffin Account Talk

[Steadygain]

Wow, you're something else man. Thanks a lot.

 

[Show-me]

Griffin,

Adv. GDP came in smoke'n hot.

 

[Griffin]

Griffin,

Adv. GDP came in smoke'n hot.

Here a quick down and dirty to understand GDP

GDP = consumption + investment + government spending + (exports - imports) GDP = C+I+G+(X-M)

Below is the text of the intro, but I'll comment real quick

We expected Exports to go up because of the weakening dollar but we also saw an increase in imports.

Now I'm going to make an assumption - but I bet that increase is primarily oil and from markets pegged to the dollar (ie China). So Wal-mart and big oil are doing good - what a surprise.

The good news in this report is from the auto sector. Does this have to do with a resuregence of increased oil prices.

Oddly enough, I was looking at picking up a commuter car yesterday (a Nissan Versa, any opinions out there?) because my truck is a guzzler. The salesmen mentioned that they were loading up on inventory in anticipation of another round of econo-box madness.

Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 3.9 percent in the third quarter of 2007,
according to advance estimates released by the Bureau of Economic Analysis. In the second quarter,
real GDP increased 3.8 percent.

The Bureau emphasized that the third-quarter "advance" estimates are based on source data that
are incomplete or subject to further revision by the source agency (see the box on page 3). The third-
quarter "preliminary" estimates, based on more comprehensive data, will be released on November 29,
2007.

The increase in real GDP in the third quarter reflected positive contributions from personal
consumption expenditures (PCE), exports, federal government spending, equipment and software,
nonresidential structures, private inventory investment, and state and local government spending that
were partly offset by a negative contribution from residential fixed investment. Imports, which are a
subtraction in the calculation of GDP, increased.

The slight acceleration in real GDP growth in the third quarter primarily reflected accelerations in
PCE and in exports that were partly offset by an upturn in imports, a larger decrease in residential fixed
investment, and a deceleration in nonresidential structures.

Final sales of computers contributed 0.29 percentage point to the third-quarter growth in real GDP
after contributing 0.21 percentage point to the second-quarter growth. Motor vehicle output contributed
0.33 percentage point to the third-quarter growth in real GDP after contributing 0.03 percentage point to
the second-quarter growth.

 

[Bullitt]

The ability to play the market correctly through all of this is rooted in having a good grasp of what the bigger picture is.

Things really aren't that bad once you take a few steps back in order to get the panoramic view. There's the occaisional fool proclaiming the purchase of gold for the coming of the armageddon, but the charts are always right. Chart says, "We are still in a bull market."

 

[Griffin]

Things really aren't that bad once you take a few steps back in order to get the panoramic view. There's the occaisional fool proclaiming the purchase of gold for the coming of the armageddon, but the charts are always right. Chart says, "We are still in a bull market."

I hope I did not imply armaggedon, I see the economy contracting and the market along with it. All this can occur and the macro bull trend remain intact. If your in a B&H strategy, I'm thinking that by the time all is said and done, 6 months or so from now, you'll be out maybe 5-10%. With that said, I see a couple scary days nestled in there. Unless, Big Ben is truely able to walk the razor's edge.

Now if we break towards new highs, I will abandon this theory quickly, but I am not going to get caught up in a model that says we should be hitting new highs and find myself holding the bag repeatdly as the marke tanks. So, I guess I should say, in the larger picture I'm more concerned about taking significant losses, then missing gains.

 

[Griffin]

I figured if the Fed wanted to keep from signalling the start of a rate cutting cycle - they wouldn't and that if they did cut, it was there intention to signal a rate cutting cycle.

I did not consider that they would cut and signal that they would not start a rate cutting cycle.

Ben is threading the needle! That puts the market in a difficult position, because the big boys will want to goad Ben into cutting. That means placing emphasis on the bad news which in turn is going to drive down the market - which is really what they want to avoid.

If nothing else, the VIX will go up. :nuts:

 

[Griffin]

View attachment 2396

2) (This is the direction I am leaning - so my opinion is obviously biased). While the larger 5 year channel and trend remains intact, we are entering a phase of long term weakness. This is characterized by a relatively strong year long bull run (see the purple circles) followed by a period of consolidation (see the green channel in 2004). In this model, I view the the two recent highs as a high probablility of being a double top (although this has yet to be confirmed). That means the blue sideways channel is more representative of the current market potential. This puts us much closer to the top of the channel (although there is a little room on the upside - the upper blue line).

Quick note for the night before I run out for T&T. We moved to the blue line today. Interestingly enough, the market did not move above Monday's resistance level until after the FOMC. If my model holds true, I would expect to the market to begin that usual toppy hucklebuck.

I may try a quick one or two day move here or there, but I am looking for a few conseutive rough days in the bond market to really drive down the f-fund price and try to snag some help there in anticipation of some profit taking somewhere in the next 3-5 days.

 

[Griffin]

.....In fact, I actually went as far as to try and check how much I have accumulated in the G fund (that's where I have all my contributions go initially) - only to realize - I DO NOT KNOW MY ACCOUNT NUMBER.

That was on 10 OCT 07, I just recieved the letter today and it is dated 24 OCT 07.

 

[Bullitt]

But just think of the added safety we have with our new TSP sign on procedures. Your account is now as secure as a swiss bank account.

 

[kaitlinsnana]

Griffin,

Thanks, that was PDQ and a little witchy. Are you in S Friday?
Gail

 

[Griffin]

But just think of the added safety we have with our new TSP sign on procedures. Your account is now as secure as a swiss bank account.

Until someone breaks in your office and starts turning over all those little places you now have to hide that scrap of paper with your passwords on it.

Would you hide a key to your front door in one of the "hide-a-key" rocks, mushrooms or gnomes?.

Somehow I just don't feel that much safer - although using our SSN# always seemed like a bad idea.

 

[Griffin]

Griffin,

Thanks, that was PDQ and a little witchy. Are you in S Friday?
Gail

The support for closing prices is at 1520 (where we are now) - last time we came down here, I mentioned that if 1520 fell apart, that would be a signal that this market is becoming bearish. It moved to 1500 (50 dma). The 50 dma is now 1510, so that's are next level of support. this makes for a seemngly good oppotunity to catch a DCB (dead cat bounce). I'm thinking about it, but I want to see a little more of today, I'll probably make the call around 1130.

Below that we move to the 200 dma and that takes us to 1480. Jobs is a powerful report and if it comes in weak, we could easily move to 1480. The indicators have again turned conspicuously bearish and that is going to open the door for that trip. A 40 point trip from 1520 to 1480 is 2.6%. So a move in could potentially yield 1%, but it also could cost a lot more.

I need to take a look at what is driving today's downturn. More to follow.

 

[Griffin]

This morning's drop came and went so quickly that the market will have all day to normalize. any DCB is going to be real minimal and given the downside risk, it's just not worth a move.

For someone feeling the need for high adventure, you may want to consider a move into stocks today. The Big Boys really want to poke Ben in the eyes, so they may just execute a sell program later today to drive the market below 1520 - could bounce from there if the jobs report comes in moderate. That's way to many if's for me, I believe the trend over the next few days will be down and I want a more reliable entry point.

 

[Griffin]

For someone feeling the need for high adventure, you may want to consider a move into stocks today. The Big Boys really want to poke Ben in the eyes, so they may just execute a sell program later today to drive the market below 1520 - could bounce from there if the jobs report comes in moderate. That's way to many if's for me, I believe the trend over the next few days will be down and I want a more reliable entry point.

So, far we've seen the sell off, which took us onto the weakside of the 50 dma slightly below 1510. If the reports come in ok tomorrow, we could see a nice DCB, but the alternative is quite possible. Durable goods has been in a downward spiral for several months now, and the expectation is that is will begin to level off and only be slightly negative. that seems to be fairly reasonable, so there is potential help for a rebound tomorrow. However, the momentum is strongly in the downward direction and it will take a little coaxing to turn it around.

As I said earlier, the next stop is 1480, that would be another 2.0%. This appears to be an optimal buying point, so if it look's like it's going to cover a reasonable chunk of that distance (say 1.1 - 1.4%), I am going to be looking to buy-in. The 200 dma is a very obvious support level and is often met enthusiastically. that could generate a real nice bounce, making it worth eating a little red on the front end (i.e. buy in Friday and loose a wee tad on Monday and/or Tuesday, if that's how long the trip down takes).

I'm fairly booked up through Monday - so this might be my last comment until then.

 

[Griffin]

After seeing the reports I had to sneak in a comment.

The jobs report cam in double the projection - probably too good to be true. That's important because that wild revision of the jobs report at the height of the subprime debacle (where it went from slightly negative to in line expectations) seems to have really cast a shadow of doubt over today's number.

The durable goods number is not bad and yet were still seeing decline.

The momentum is down and I expect that to continue all day. I''m not sure where it will end. (1480 is my projected bottom - but I dont think it will get quite there today)

Unless it manages to throw the brakes on over the next hour, I'm probably going to buy back in today, otherwise I'll wait until Monday.

 

[Griffin]

The Internationals are at a fairly solid support, so even if the US does slip further, I think they may be a good bet. There's no end to the decaying dollar, so even though it is breaking new lows, that does not seem to be a reason to think it is going to rebound.

I'm moving into the I 100%

 

[Pilgrim]

I'm moving into the I 100%

You think there's much chance of a big rebound this afternoon resulting in a large +FV today? Makes the I seem somewhat worrisome.

 

[Griffin]

You think there's much chance of a big rebound this afternoon resulting in a large +FV today? Makes the I seem somewhat worrisome.

Actually, the opposite - I see 1490 failing after chow, and a drop to the 200dma. That will trigger a - FV, but since the internationals are mostly sitting on very strong support, they won't reciprocate come Monday and if we do get a bounce, they'll start the trek back up from their current positions rather then an early move down. Does that make sense? I hope it does, cause I got to go.

 

[Griffin]

You think there's much chance of a big rebound this afternoon resulting in a large +FV today? Makes the I seem somewhat worrisome.

Although the FV Pilgrim suggested did not happen, the damage he eluded too did get the better of me (I bought the I on Friday), since the market rallied in the last hour (instead of selling off, which is what I thought was the more likely scenario).

Now we are looking at a rocky start. There are two solid levels of support the S&P may use to lead off the next rally. One is 1490, like 350z suggeted, the other is 1480 (200 dma) which is what I was thinking. After watching the action of the past couple of day, it appeared 1490 was going to provide us the support I was looking for. That still might be the case, and that is exactly what we will see tested first thing this morning. Although I talked up the 1480 as the more likely support level, I adjusted my plan based on what we saw Friday morning. I will be a bit disappointed if we move to the 1480 level because I will have second guessed myself to my detriment. That's part of the game, but it sure feels good when you pick the bottom and are proven right.

I am considering a move to the domestic funds today. Not because of any dollar related issues, but because there is a possiblity of a +FV if our weak opening is going to carry into the lunch bell. It's a gamble, but this game is all about playing the odds - which is why I moved Friday, rather then waiting for Today. Sometimes it doesn't go quite the way you planned, but that's to be expected. I will execute this move, if 1490 support level holds and we don't rally into the noon hour.

 

[Griffin]

It looks like the scenario I described that would keep me put in the I-fund, is the one developing - so I will not be making an IFT.

The rally into the noon hour makes it unlikely we will see an FV today. However, the USM should give Japan and Eurozone a reason to get bullish if it stays in this tight trading range for the rest of the day.