Saturday, July 17, 2010

Goldman Tax - No Truth, Just More Lies

That's why we get to pay their bills. I am quite sure that the SEC fine was paid with profits generated by an off balance-sheet vehicle that is unaudited, masquerades as an an airline and somehow ended up with a bunch of GS call options prior to this deal as another so called "hedge". In fact, I would reason that Goldman made 2 to 3 times the cost of this settlement, at least, due to their extensive skills in financial chicanery, regulation circumvention and general manipulation, prior to the settlement announcement. And what would prevent them from doing that? ohhh, silly things called regulators and laws. But as you can see it is more profitable to circumvent social, implied or legal responsibility because when you can decide to take the system down at your will, you are the army, government and police - so anything is possible. Even the little pawns like the SEC and CFTC are scared of you when you are Goldman Tax.

One thing is for sure, you and I will get the bill. So, now that they got someone else to pay their fine, what's next for Goldman Tax? I guess we will have to ask Obama and his boss Bernake. We must be able to get an authoritative answer there. And here it is...the quote of the week: "There will be NO MORE tax payer funded bailouts. PERIOD!" - Assistant Chief Executive of the Fed, Barack Obama.

I have heard a lot BS from Obama about one fact or another or change or another that will turn out this way or that, most of them have been outright deceptions and this statement will bear out to be aswell.

There will be bigger and bigger tax payer funded bailouts because Obama and Bernake (and as a whole the political system as it is constructed now) have the power and ethics to lie to us all and objectives to empower and enrich their special interests. Please don't forget that Goldman Tax is one of the priority interests. So is JP Morgan.
More at The Real News

Friday, July 16, 2010

System Position Update

Below are the results of the swing system trades. Currently, this exit represents a hedge-point for the newest release of RVS and portfolios are hedged to limit the risk for the current trade. The trend following enhancements to the RVS model are now holding the short position till its deemed to be expired. Then the position will be closed. This means that the trade could extend for quite some time. I would like to add that though I have been using this blog to communicate with clients I will not be publishing all the trades or the latest model triggers via a public blog. It has been a very good mechanism to confirm, communicate and reference live and funded trades. We allocated around $50,000,000 on the ES trade, while the TF trade which took 35 points on this run, had around $20,000,000 allocated. I do think we were effective during very challenging markets.

This weekend I am releasing the updates to RVS and additionally, I am releasing some amazingly powerful forex systems with outstanding risk and targeting controls. We will be allocating a large amount of our assets to the forex markets, which I am excited about, but has also been very demanding from a development perspective. 

Regarding my take on the markets, I see a possibility for a bounce and the new RVS method sees this as a hedge-point, however, I reiterate my comments regarding the dollar and the markets as a whole, therefore, I expect to be much much lower over the near-term. And as I pointed out on Wednesday, the market cycle is a very large hurdle to overcome. If prices were to over come that cycle in the 1100 area in the ES I would view that as a significant achievement. 

In so far as I can be helpful, I will try to keep updates on my blog regarding the major inflection points in the markets - as I have done recently. However, there is reason for me to potentially a private (though not charged) blog where I can ensure a constructive and positive interaction on a proprietary basis. 

Today, i found the following chart on THEMAXFACTOR blog: 
Max has used my charts in the past and apparently possesses, at the young age of 15 in Switzerland (where apparently you don't have to go to school and you can spend all day trading the markets), the capability to produce high quality trades. Max made some very good comments regarding draw downs and risks and I appreciate that he has consistently reference my charts on his blog. This goes back to my previous posts regarding allocation amounts. However, what Max may have achieved in confidence/arrogance has not been matched by analytical ability. 

I would like to point out that one of the nice characteristics of these systems, especially the dailys is that they take the smallest positions early and the largest late. In the ES system we built a 20 contract position in the model (which trades live) with an initial 2 contract entry. This ensures in fact the the drawdown risk is significantly reduced and enabled an average price in the 1070's, which will look like a great fill when looked at several months from now. Therefore, the point regarding being deep in the red is curious and misguided. The market situation has been in a highly dangerous posture and may or may not have made it to ideal levels to short, this is why an initial position is initiated and the positions are built in the manner that they are. Additionally, there is a self assessed performance analysis and risk analysis basis for these systems to self-manage their trading risks, probabilities and allocation sizes based on their performance in the markets that they trade. This has been a considerable effort for me to build but is very exciting and has opened tremendous opportunities in markets that make the TF and ES look calm, Forex and commodities for instance. I do recommend that Max demonstrate more of what his most intriguing post and concept are as he seems to follow them very well as can be easily seen via the portfolio shown below. 

As most market participants know, trading and arrogance are not bedfellows though they are common occurrences and it seems even in Switzerland. For an example of "garbage in and garbage out", I highly recommend looking at Max's trades and his portfolio which has taken quite a few 50% draw downs lately and did not fare welll today...(included below) It is easy to know what to do when you don't have to do it. Its also easy to back date posts or post trades in posterity, As I have real money trading and real clients, I am keen to share the good and the bad and I have an interest in presenting thing in a way that builds a understanding and integrity, therefore, I make a deliberate effort to leave my posts unchanged and also post information as I it develops with no filter. I do hope that this effort is obvious. 

So, shorting the ES in the 1070's certainly was reasonable and trade risks within reasonable tolerances. The advantage of trading a daily system like this is that you are not likely to get into situations, like BP, where you catch the knife for 50% haircuts. This is also the reason, that I like to allocate 10 to 30% of the equity in an account to risk positions rather than more and also why I focus on index trading for equity style investments.

I have been overwhelmed with the recent development efforts and enhancements fto the RVS/HLA and Cycle models and risk management systems - which have been a mind numbing process of refactoring, rewriting and re-architecting and finally reimplementing the derived model functionality, trade controller and risk management infrastructure - a few times. Usually just about when I thought I was nearly totally done. This combined with fairly substantial capital allocation/management decisions has left me practically no time and mostly no energy to follow through on personal and exploratory opportunities (Vimal among a few others please accept my apologies)

Thursday, July 15, 2010

Time for dollar rally and apotentail market crash

Dollar at huge support and ideal target. Market at top. Should the dollar rally, as I expect, it will be a huge rally and possibly catastrophic for the markets. Charts to come.

Florida senator: Obama told me we can’t deploy oil skimmers because they might be needed elsewhere

Oil Spill Mess = Cap and Trade "Yes"
Oil Spill Cleaned up = Cap and Trade "No"

Way to go Obama!

JP Morgan - Earnings Fraud Once Again, Again...

Ok, this is getting to be like a habit. The last time they reported great earnings they used accounting gimmicks and loan reserves for most of their profits...even with all the free money and fake accounting given to them thanks to the Fed, they made most of their money by reducing loan reserves because everything was getting "better and better and better". Interesting, this time they make a point to say profits were reduced in the consumer lending division and performance was unacceptable in that division. Ohh, so  commercial and wholesale loans require 1.5 billion less in reserve requirements therefore we made 1.5 billion this quarter on bad loans?! If Dimon and company can't make money the old fashioned way when they still get money and credit given to them free and when they still mark assets a mystery prices - what's going to happen when things get really bad.

Jamie, is succession planning still priority #1? We really believe you in zombieland! Time for the market to go up on this solid news...we believe you Jamie and we believe you Benakejing. NOT!

Live from Bernakejing, China...its a new data manipulation

Who do they think they are fooling? Is the market really that insane that it will get more confidence from a number that makes absolutely no sense? BDI is a great way to gauge china. Shipping rates have dropped nearly 60% over the time that china reports 10.3% growth. There IS a reason for that...its called "no exports". There is also a reason that the shipbreaker business is swamped - companies are dismantling ships they don't need...and most of the rest of them are sitting idle waiting for the off chance that somebody wants a delivery from China for something that is not an imaginary town funded with not imaginary credit in an imaginary economy. Now I know what Timmy Geithner and Bernake think they can accomplish at these G20 conspiriatory meetings.

Can someone please explain to me how a country with billions of people can grow at 10% in the middle of a depression? Even US banks with free money and congress in their pockets can't do it - but a country with billions of people and crashed export demand can actually come up with a growth number most companies in the world would be happy to have right now.

More lies = more lies and less confidence...any way you try to look at it I can not come up with one good way to spin this...I am sure that JPM will have a way and probably made a lot of money on that imaginary 10.3% growth china had on its imaginary balance sheet. More fundamentals we can rely on - amazing!

Tuesday, July 13, 2010

TF and ES add on the close

from ZH: Seller Heavy Market Bid-Ask Stack Means Lifting Offers Pushes Stocks Higher As Increasingly More Shares Sold

Island reversal could set up for tomorrow or perhaps the breakaway on no volume is another alternative. In case, looks like exhaustion to me.
This is an intersting post on zerohedge...and is reflecting the crazy market dynamics that are effecting trading momentum and pushing us further in whatever direction the market is going than normal buying and selling dynamics would seem likely to do.

Seller Heavy Market Bid-Ask Stack Means Lifting Offers Pushes Stocks Higher As Increasingly More Shares Sold

Tyler Durden's picture

Welcome to reverse distribution. The Bid-Offer stack in the ES is telegraphing the intentions of market participants who can't wait to offload positions, yet are doing so in a way that is pushing the market higher: any bid-side interest is occurring via market trades lifting the ES price courtesy of a massive ask-side inventory which however is locked into limit positions and refuses to go VWAP or market. Yes - sellers outnumber buyers two to one, but unlike panicked shorts who are urgently covering exposed positions, are willing to wait to get their desired price. And with every lift, the NBBO ratchets up one notch higher, creating a feedback loop. The more ask side interest, the faster the market rips, even as the imbalanced market with much greater sell-side interest clears progressively higher! Nothing like selling causing rising prices in this latest installment of the bizarro market. 

Market Marking or Book Making?

Baltic Dry Index - a usually leading indicator

I wonder what the Alcoa management is missing - well except capital reinvestment.

Retails Sales Report Tomorrow

ES Daily Swing Short adds a small entry short at the close

I apologize for the late post...but I was not feeling well today and did not get to it till late.

Monday, July 12, 2010

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