Wednesday, December 3, 2008

Laurie Anderson, "O Superman"

This is going to be "too much" for most of you.

The RO Report, "Epic Battle" Edition

There are some key levels right now that the bulls are defending and I have to say, after months of washouts, it's inspiring to watch.

The fact that we've had strong rallies two days in a row after the bears tried to kill strong morning moves to the upside is very good for the bulls. If I may be so bold, I'd say we have a shot at visiting the Dow 50dma sometime in the near future. Currently, that number is 9082... I'd expect heavy resistance between 8900 and 9000 though. After that, I'd be neutral until we could break higher on volume.

Anyway, enough about what I think. Opinions are fairly worthless in this market and I haven't forgotten Monday's disaster. I just like what I'm seeing and wanted to let you know, mostly because I was so bearish for so long. It's just rare for me to be positive about anything.

By nature, I'm a bit of a hater.

The RO had a solid day. It wasn't an easy day, however. It felt choppy out there and there wasn't a lot of strong conviction about what the market was going to do. I mean, I had strong conviction but my execution has been awful, so I don't count.

Out of 16 traders* today, 11 finished gross positive, or 69%. 7 traders finished up over $1,000 gross and only 2 lost more than $1,000 gross. I was #7 of 16.

"Lucky Pierre" - Trader A, $18,583 on 395k shares traded.

2. Trader Z, $15,763 on 214k shares traded.
3. Trader N, $4,243 on 62,400 shares traded.
4. Trader 7, $1,596 on 14,000 shares traded.
5. Trader C, $1,441 on 120k shares traded.

"Chambermaid" - Trader R, -$2,092 on 72,600 shares traded.

2. Trader V, -$1,021 on 71,200 shares traded.
3. Trader B, -$311 on 526k shares traded.
4. Trader D, -$173 on 395k shares traded.
5. Trader 11, -$163 on 5,800 shares traded.

*Due to a technical glitch, I don't have stats for some of the traders today.

The "D-Word"

Chrysler guy gets a fail for even mentioning this...

A top Chrysler executive warned Wednesday that a carmaker collapse could send the economy spiraling into a depression, while the United Auto Workers agreed to new concessions for their companies. Jim Press, Chrysler's vice chairman, said the U.S. automakers were "down to months left," as industry officials ratcheted up a fierce lobbying push to persuade Congress to approve as much as $34 billion in emergency aid. "We're on the brink with the U.S. auto manufacturing industry," Press told The Associated Press in an interview. "If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it's a huge blow. It could trigger a depression.
Meanwhile, Ken Lewis of BAC said he sees a "ray of sunshine" shining on the economy 6 months out.

I ask you this... is it obvious who already drank from the bailout bucket and who hasn't?

The Great Depression Visits DT's House

Two years ago had I walked into the middle of my town with a bloodied Pomeranian and thrown it, I probably would have ruined a real estate broker's shirt. People who I drank with at grungy bars during my "dart phase," who were previously unkempt and dirty, suddenly cleaned themselves up and were handing me business cards and asking for referrals.

They were pretending to be "positive" and healthy. "Fuck them all," I often thought. "Fuck them all..."

Anyway, fast forward to yesterday. I'm still unkempt and dirty and trading from the spare room of my house. And, despite my attempts to follow the thoughtful advice from my therapist to "be aware of my breath," I haven't changed much. I'm staring intently at my screens and cursing myself for purchasing DLR "too early." I'm doubling my position to an uncomfortable 1200 shares when I hear a knock at the front door. No one I know comes to the front door, but we're having a new countertop installed so I figure I should answer it. One last glance at my screen tells me my most recent purchase is already unprofitable. Cursing, I turn away from my desk and walk downstairs to open the door.

I didn't recognize the woman immediately but she looked vaguely familiar. In fact, the first thing I noticed was her very expensive set of glasses (definitely 2 or 3 years old). She stammered, "Hi, DT! I know it's been awhile, but I'm cleaning houses now!" She was straining to sound positive. "I just wanted to give you my card and ask for any referrals if you know anyone in the area" (and here she turned around and looked at the house across the street and spread her arms out) "who needs their house cleaned!"

I felt immediately uncomfortable by the situation, especially once I realized that 3 years ago, this same woman had sold the house across the street for a couple million. She had been known all around my area as "the one" to call if you needed to get your house sold. And here she was trying to make $20 an hour scrubbing my toilet. But I couldn't get all empathetic, and "human" with her, I had 1200 shares of DLR working against me. I told her I'd "keep my ears open" and I closed the door to rush back to my turret.

DLR had dropped further and I sold out for a loss.

Now I had time to think about the woman some more. I wondered how she must have felt walking across my front lawn and getting into her car. I remembered a conversation I had with her a couple of years back. She had adopted a daughter from China and was asking me about saving for college. People sometimes think that because I trade stock everyday that I have some kind of knowledge about how to invest; they're wrong. I told her I hadn't the slightest idea... I just traded. She laughed and said, "Well, as long as the housing market keeps this up, I won't have to worry about it anyway!"

Things can change quickly... I thought about how desperate she must be, to be looking for a job cleaning houses from which she once made huge commissions. Then I thought with some humor about my cleaning lady, an "illegal" from Poland who had a son. I wondered if she ever thought an ex-real estate broker would be her competition.

I thought, and admittedly, this wasn't a nice thought, "Looks like Dominika is due for a pay cut." I smiled.

Suddenly, the drop in DLR made sense to me.

Where Will The Stock Market Bottom?

The results are in and 146 of you voted. Nearly 50% of you feel the market is headed to at least 6000 before we ultimately bottom.

I feel pretty good about our recent low, just around 7500. However, days like Monday make me very nervous.

Anyway, here's how you voted:

7500 16 votes or 10%.
7250 14 votes or 9%.
7000 6 votes or 4%.
6750 13 votes or 8%.
6500 17 votes or 11%.
6250 4 votes or 2%.
6000 9 votes or 13%.
sub 6000 57 votes or 39%.