MaoXian.com -- Archive > July 12, 2004

Tomorrow morning we have to go for a pre-baby Mommy check-up so I won't be around much, but I should make it back by the market open.

Tone was poor from the get-go, it paid to play the short side.

EOD Suspects:

Posted at 21:30, GMT

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The word that Captain John Smith used to describe his forty years at sea in his last interview before sailing off at the helm of the Titanic: "uneventful."

Posted at 17:19, GMT

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Tradestation Group's Q2 earnings conference call is scheduled for Monday, July 19 at 8 AM ET. I will listen in and blog anything of note.

Posted at 13:32, GMT

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The chart tells the story, but are you listening?

US Dollar & Swiss Franc, Weekly Chart

"During 2002 we entered the foreign currency market for the first time in my life, and in 2003 we enlarged our position, as I became increasingly bearish on the dollar. I should note that the cemetery for seers has a huge section set aside for macro forecasters. We have in fact made few macro forecasts at Berkshire, and we have seldom seen others make them with sustained success." -- Warren Buffett, 2003 Letter to Shareholders

"During the first quarter of 2004, market risks associated with foreign currency forward contracts increased significantly. The notional value of outstanding contracts increased about $7 billion to about $18 billion at March 31, 2004. As a result, the potential effect of currency exchange rate changes on the fair value of these contracts increased. The fair value of unhedged open foreign currency forward contracts totaled $870 million at March 31, 2004 and $630 million at December 31, 2003. Changes in such amounts are reflected in earnings (as realized gains) in the period of the change." -- Berkshire Hathaway 10-Q for the quarterly period ended March 31, 2004

Posted at 9:34, GMT

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Today's Freebie Swing Trade Pick is CPWR. Yes, still Compuware. She coiled a little tighter still last Friday, so it will pay to keep an eye on her. Range contraction precedes range expansion, blah blah blah.

CPWR, 15-min. Chart

Posted at 9:21, GMT

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Last week's decline caused the pessimism to pick up a bit, but it still has a lot of room to get worse. The CBOE equity-only put call ratio has begun to act very funky. I don't know what's going on, but it looks like the numbers may be "useless" now.

The QQQ option volume is so huge that it may be distorting the equity-only put call ratio into a quasi-index put call ratio, but I'm not sure if CBOE includes the QQQ volume in the equity options numbers.

What made the CBOE equity-only put call ratio useful was being able to see what kind of straight bets the little guy was placing. The QQQ options are being used by institutions to put on sophisticated hedges and spreads, etc.

Insight into popular sentiment is easier when the smart money and the dumb money are kept separate. I'm thankful that I can turn to the ISE put call ratio for this information, and I may quit following the CBOE numbers altogether.

S&P 500 Index with Sentiment Indicators, Weekly Chart

Posted at 8:58, GMT

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Literary Reading in Dramatic Decline, according to NEA survey:

"The decline in reading among every segment of the adult population reflects a general collapse in advanced literacy. ... The rate of decline for the youngest adults, those aged 18 to 24, was 55 percent greater than that of the total adult population."

Dude, that sux.

Posted at 8:39, GMT

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An excerpt from Imperial Hubris, taken from Michiko Kakutani's review:

"U.S. forces and policies are completing the radicalization of the Islamic world, something Osama bin Laden has been trying to do with substantial but incomplete success since the early 1990's. As a result, I think it fair to conclude that the United States of America remains bin Laden's only indispensable ally."

Posted at 7:59, GMT

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