An Artist In The House

Help Me, Help Me, Help Me

The tax man's taken all my dough,
And left me in my stately home,
Lazing on a sunny afternoon.
And I can't sail my yacht,
He's taken everything I've got,
All I've got's this sunny afternoon.

Maybe the most poignant song ever....at least on this annual anniversary of altruism, i.e. April 15th. Tax filings and our faces are probably the two biggest constants in our lives, they just don't change. One can argue that our faces change, but that is more erosion than change.

My girlfriend's run off with my car,
And gone back to her ma and pa,
Telling tales of drunkenness and cruelty.
Now I'm sitting here,
Sipping at my ice cold beer,
Lazing on a sunny afternoon.

Why can't I be this guy? Drunk, cruel, a car worth stealing, a taste for beer? Ok, I have a relatively nice car, but I am not a drunk, I am the opposite of cruel and my drink of choice is a Manhattan, Jack, on the rocks. Nor have I ever done anything even remotely deserving my girlfriend running away from me to go back to her parents. (But how I have fantasized about it.)

Help me, help me, help me sail away,
Well give me two good reasons why I oughta stay.
'Cause I love to live so pleasantly,
Live this life of luxury,
Lazing on a sunny afternoon.
In the summertime
In the summertime
In the summertime

There is almost never a perfect time to do anything. But contemplate the idea, the possibilities, the dangers and the adventure, that shining moment of the, "sail away," daydream that we all have had, or maybe continue to have, or are haunted by having. Yes, there still may be an April 15th at the end of that rainbow, but so what?

A

Why Everyone Should Take The Next Market Sell Signal

The story being told by these charts is not a signal to sell the market. It is suggestion that when the Intermediate (Daily) Trend Models reverse Short, that the trade will have significant downside potential.

More on this, along with trading ideas. if and when the models reverse down.

Old Man

There are several videos of Neil Young performing, "Old Man," on YouTube. But this one is especially poignant, taken from his performance at the Grand Ole Opry in 2006. At the time, he was 61 years old. That makes him now 68 and makes this song 7 years more poignant. Many of us remember Neil at 24 and aged right along with him. I always think he is singing this song for me.

Important Weekend Update: March 9, 2013

What follows is my Weekend Update for March 9, 2013 which I sent out to AllanTrends subscribers earlier this morning. In the 3 1/2 years I've been sending out Updates, this is the first one I labeled, "Important." Not that the others weren't important, just that this one was very important. Not that the others weren't very important, this one was very, very, important. You get the idea. Note especially the paragraph where I address the so-called "average 13% annual returns of the stock market," that paragraph is even more important than the others.

Weekly Market Analysis

I’ve covered this topic many times before, but it is so vitally important for making money in the market and in particular, making the highest and best use of this service, that I am covering it again.

Trend Following

Trend following is an investment strategy based on the technical analysis of market prices, rather than on the fundamental strengths of the companies. It tries to take advantage of long, medium and short-term moves that seem to play out in various financial markets. The strategy aims to work on the market trend mechanism and is intended to be capable of making profits from both the ups and downs of the markets. Traders who use this approach can use current market price calculation…….and channel breakouts to determine the general direction of the market and to generate trade signals. Traders who employ this strategy do not aim to forecast or predict specific price levels; they simply jump on the trend and ride it.

At AllanTrends, we follow a proprietary trend line based on an Average True Range calculation that identifies dominant trends with a minimal (but necessary) amount of whipsaws. We take small losses as a price to pay for large, sometimes huge (GOOG, NFLX) gains. We use the trend line to exit or short stocks that are signaling the end of an uptrend and the beginning of at a minimum, an intermediate downtrend (AAPL). The same technique applies very effectively to intermediate and longer trends in market indices (DJIA, SPX and NASDAQ) as well as major commodity ETF’s (GLD, SLV, USO).

The stock market is now entering a period of frothy market sentiment. In his February monthly Elliott Wave Theorist, Robert Prechter identified 16 separate market sentiment indicators indicating extreme investor optimism (Market Vane’s Bullish Consensus, money market fund assets at record lows, insider selling, margin debt, volatility index at record lows, etc.). A top is almost certainly in the making.

But as trend followers, we continue to be Long the U.S. stock market. Until (and unless) the intermediate trend turns down and so long as the dominant trend is up, as the late (and great) Martin Zweig observed, “The trend is your friend.” In the 1st qtr of 2000, the market topped with the Nasdaq entering into an 80% decline over the next two years. During that same time, the S&P fell 50%. Yet, Buy & Hold advocates point to a 13% annual gain in the stock market over the past 20 years to herald the wisdom of just, Holding. Tell that to any of us who sat through 50% to 80% declines in 2000-2002 and again in 2007-2008. The likelihood of most investors holding through bear markets is slim to none, while the chances of selling out at or near the lows is extremely high.

By following the dominant trend, such personal financial calamities are impossible. The AllanTrends proprietary trend line doesn’t get out at the absolute top nor get you in at the absolute lows. But it does protect about 85% of the gains built up in bull markets and avoids about the same percentage of decline in the bear markets. For the more active investor, those 85% declines can be very profitable by shorting stocks and indexes and with the advent of inverse ETF’s make it easy to make money on the declines by simply owning an inverse ETF (DXD, SDS, TZA).

In other words, enjoy the party while it lasts, but let’s keep one eye on the door for accounting purposes, i.e. first in, first out. Taking that a step further, be prepared to use our trend models and the inverse ETF’s to extract exit tolls from those running out the door behind us. To everything, there is a season.

Voice From The Past, Part II

In the Spring of 2009 an anonymous voice from my past,let's call him "Z," contacted me about buying Plantinum. With his permission, I shared his recommendation with my AllAllan readers, along with a suggestion to buy Plantinum futures and/or Stillwater Mining (SWC), the sole U.S. producer of Platinum and Palladium. Later in the year, I started my subscription service, AllanTrends.com, which despite being a commercial and personal success, Z made it clear that his future comments on the markets would no longer be allowed to be made public. It was a trade-off I was willing to make.



As you can see from the SWC chart, Stillwater rose from about $6 to just above $25 in the ensuing two years. This was the first and only trade that I posted from “Z”, although other private recommendations over the course of the three decades of our acquaintance were similarly successful. Had I acted upon what he described at the time as a, "Christmas gift," in early December, 1999 to, "Exit Stage Left," in reference to the tech bubble, I would be absolutely retired from this business, or any other business well before I turned 50. Some of his more dire predictions have yet to come to pass, as the equity markets continued to rise from the March, 2009 lows.

But that was then and this is now. “Z” called me, unexpectedly as always, this past week in what started as a philosophical-laced nostalgia of our times. The course of our conversation brought us to the subject of change and how no matter how prepared we think we are for the future, we are only truly living when the future takes us by surprise. In Z’s words, "Its the only way to live.....and the only satisfying, fulfilling way to die." I have no idea what that last caveat means, but of everyone I have ever known, this guy gets it.

This post isn't about whimsical reunions with intriguing characters from our past. It is about the second time Z has allowed me to make public one of his financial observations. It came only after I lamented that had I cashed out of my technology portfolio in December of 1999, how different my past 12 years would have been. Z, now very advanced in age in life, said he had a purpose for this call that might dovetail into that particular theme of regret.

Getting to the point of this blog and to paraphrase my friend, "Z", Europe, Asia and all global emerging markets are toast. When asked about North America, there was silence, followed by his observation that money that would normally be flowing into hard assets or other economies is disappearing. The billions being printed by the central banks around the globe is simply vanishing. Chaos is spreading across the very top echelon of the world's financial order. The central banks and their puppet masters are not squirreling away money in secret Swiss bank accounts, nor are they funneling these funds into safe havens, there are none. There is no secretive grand "New World Order" scheme, but a burgeoning, temporarily veiled, panic. This will not end well, says Z, if it ends at all.

Still paraphrasing, Z surmised that the slew of bearish global equity etf's will explode not unlike the tech bubble of 1998-1999. But he emphasized that while these bearish bets will likely rise commensurate with the declines world's economies, these gains will be short-lived. Paper assets of all kinds are destined to become worthless; stocks, bonds, currencies, anything paper. There is a window of opportunity to profit from shorting currencies and going long bearish etf's, especially those of the European Union and developing markets, but don't overstay your welcome, paper is going to zero in the next 18-24 months, as well as whatever the value of what is supposedly backing it all up.

Have a nice weekend.

A

Duquesne Whistle

What's In A Name?

No Words Can Describe - Paval Datsyuk

Every Absurdity Has A Champion To Defend It

Oliver Goldsmith, (born Nov. 10, 1730, Kilkenny West, County Westmeath, Ire.—died April 4, 1774, London), Anglo-Irish essayist, poet, novelist, dramatist, and eccentric, made famous by such works as the series of essays The Citizen of the World, or, Letters from a Chinese Philosopher (1762), the poem The Deserted Village (1770), the novel The Vicar of Wakefield (1766), and the play She Stoops to Conquer (1773).

A great source of calamity lies in regret and anticipation; therefore a person is wise who thinks of the present alone, regardless of the past or future.

Every absurdity has a champion to defend it.

The hours that we pass with happy prospects in view are more pleasing than those crowned with success.

A man who leaves home to mend himself and others is a philosopher; but he who goes from country to country, guided by the blind impulse of curiosity, is a vagabond.

They may talk of a comet, or a burning mountain, or some such bagatelle; but to me a modest woman, dressed out in all her finery, is the most tremendous object of the whole creation.

Success consists of getting up just one more time than you fall.