May 9, 2008


links for 2008-05-09

SORRY, most of these links are broken … not sure what the problem is with the daily blog post from delicious, but I expect it will self-heal.

May 8, 2008


Cyclone May Blow Sequential Count Out of the Water

Rice Gains for Fifth Day on Myanmar Cyclone, Increased Demand

“Cyclone Nargis struck the country’s main rice-growing area on May 3 … Myanmar had been expected to export 600,000 tons of rice this year … If Myanmar becomes a net importer it ‘will seriously affect the prices of rice globally’ … Myanmar’s government has declared a state of emergency in five low-lying provinces in the Irrawaddy delta. The five account for about two-thirds of the country’s rice production and half of its irrigated area.”

Folks were hoping that the weekly trend in rough rice would exhaust around the $20 mark, but since the cyclone hit Burma all bets are off.


Click to enlarge (Rough Rice (generic front month), Weekly chart)

Will the Regional Banks Break to New Lows?

Subscribers currently have a short in the KBW Regional Bank ETF (KRE) with a target zone of $32.41 to $31.81. That’s a really critical level for KRE since $32ish acted as key support during the dark days earlier this year.

On a side note, I’m limiting the number of subscribers to the Box to an even 100 people. This should help me keep things simple and a make it a little more exclusive (I can also toss any gripers out this way — let me say here that 99% of my current subscribers are beautiful, generous people).

KRE

links for 2008-05-08

May 7, 2008


Guessing When Crude Will Hit $200

Goldman’s Murti Says Oil `Likely’ to Reach $150-$200

“‘The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months,’ the Goldman analysts wrote in the report dated May 5. ‘The core of our super-spike view has been that a lack of adequate supply growth coupled with price-insulated non-OECD demand growth’ is leading to higher prices.”

Anyone can slap a regression channel on a chart, which is probably what the Goldman guys did to come up with this not-the-least-bit-bold forecast.


Click to enlarge (Crude, Monthly chart)

links for 2008-05-07

May 6, 2008


links for 2008-05-06


Breaking from the Unreflecting Herd

Can You Become a Creature of New Habits?

“When we consciously develop new habits, we create parallel synaptic paths, and even entirely new brain cells, that can jump our trains of thought onto new, innovative tracks … the more new things we try — the more we step outside our comfort zone — the more inherently creative we become … ‘you must break the major rule in the American belief system — that anyone can do anything. That’s a lie that we have perpetuated, and it fosters mediocrity. Knowing what you’re good at and doing even more of it creates excellence.’

There are three zones of existence: comfort, stretch and stress. Comfort is the realm of existing habit. Stress occurs when a challenge is so far beyond current experience as to be overwhelming. It’s that stretch zone in the middle — activities that feel a bit awkward and unfamiliar — where true change occurs.”

I think this is true and explains why working with markets is so valuable — you have to bend your mind around something new every day.


Simultaneously Proud and Aggrieved

China’s competing nationalisms, by David Shambaugh

“The current hyper-nationalism is also fueled by the deep feelings of discontent and resentment currently gripping large sectors of Chinese society - wage arrears, stagnant incomes, unemployment, inflation, corruption, severe class disparities, environmental deterioration, moral vacuum and a deep sense of losing ground in China’s Hobbesian economy.”

True, and it’s remarkable that things are as stable as they are given the state of things.

May 5, 2008


Shorting Starbucks, Missing Big Bucks

One of the Box’s better ideas in early April was a short in SBUX (see spreadsheet here).

The problem is that following the ABC Stop Method would have gotten you out seven days before SBUX blew up — true, at a profit, but a much smaller profit than could have been had.

In future, I’m offering the ideas but won’t track them. I simply suggest managing all open positions in one of three ways:

  • Plan A: Move the initial protective stop to breakeven when price closes beyond one times initial risk; begin trailing stop when price closes beyond two times initial risk.
  • Plan B: Move the initial protective stop to breakeven when price closes beyond one times initial risk; begin trailing stop when price closes within the Target Zone.
  • Plan C: Stay with the initial protective stop until price closes within the Target Zone, and then begin trailing.

I’ve been thinking of calling the newsletter, in honor of this new habit of not tracking anything, “The Unaccountable Trader.”


Click to enlarge (SBUX, Daily chart)


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