economy, INVESTMENT ADVICE, STOCK MARKET

LAST EXIT OFF THE HIGHWAY TO HELL A down September leading to an October bloodbath

September 24th 2016

 

One of my favorite people in Wall Street and a former boss, JLD used to say “I’d rather be lucky than smart” and that´s what happen to us in the last quarter. Just five traiding days after my last blog one stock of my Short list dropped 110 points, Priceline (PCLN). Now I don’t know about you but if I had a Short drop 110 points in 5 days, that´s $250,000 on 25 puts. I would have at least taken half the gain, if not all of it. That alone would have covered all the cost of my other puts, where 2 or 3 had 10 and 15 points gains all the other lost money but Net-Net we still would have had a great quarter.

In my last blog I said that one of my internal market indicators turned bullish (the new highs, new lows numbers) and that the Dow could see a new high and I also said if it breaks new highs on big volume, you should sell all puts. Not only did it not move higher on big volume but the higher it went, the smaller the daily volume totaled.

Volume actually decreased each day, never a good sign.

Don’t underestimate the value of internal market indicators, the new highs new lows indicator is now neutral.

Also, just remember the Dow is only 30 stocks. There is roughly 6 to 7 trillion dollars under management.

I am sure a small % of these Mutual Funds and Hedge Funds spend a large part of the trading day trying to move the Dow up, what they have got to lose.

I call these guys “The Dow 30 Video Game Boys”.

The same with the S and P futures, they almost always move higher overnight when the volume is small but as soon as the next trading day begins, they are hit to a more realistic price level.

The Dow is only 30 stocks, the S and P is 500 stocks.

The index to watch is the NYSE, it´s 3300 stocks and that index never hit a new high, in fact the best level it reached was almost 360 points lower than its high for the year.

You should still be buying puts and add GS and BIDU to the short list.

Oh! Talk about luck; I got an e-mail this week saying that Jim Chanos, the king of shorts and Enron fame, just put out his new best short idea, TESLA (TSLA) which has been on my shortlist.

I think zerohedge.com is one of the finest web sites out there. They recently wrote “There are over 40% fewer stocks listed in 2016, than in 1996” that may be the only reason this Bull market has lasted this long. That’s like twice as much money chasing half as many stocks. Does that make me bullish now? NO.

Because last year June 2015, when I said we were already in a recession, and a Bear market will begin. I was a lone voice. Since then the market have moved sideways and most stocks trend lower in a range bound market, as for the roughly 40% fewer stocks being listed.

To me it means they will be hit twice as hard in this Bear market as earnings continue to slide.

Well we didn’t See 13,000 Dow yet and that made me depressed for the last 3 months. I mean I´ve been wrong before, at least once, maybe twice but never for this long. One year wow!

When I am depressed I usually do one of three things:

First I’ll read some of my positive emails, one of my favorite is: “You know what I like about marketcallanastasi? He says the same thing everyone says, but 3 to 6 months before everyone else”.

Not this time. I called for a recession and Bear market; well I got the recession right.

The next thing I do is listen to Pink Floyd’s “Dark side of the moon” their music and only their music put me in a transcendental state and I think it is the combination of the slide guitar and organ, then when I heard “Comfortably numb” I said that´s perfect description of this market.

The last thing I do is work out, you know what?  I am going to go listen to more Pink Floyd.!!

Well I shouldn’t feel too depressed about Dow 13,000, we’ve had 4 good corrections in the last year and a half, and my readers made lots of money, that’s more than most Mutual Funds and Hedge Funds can say. Besides I like all the names of the people, money, managers, funds and banks that turned bearish 3 to 6 months after me, even Donald Trump. Wow!!!!!

Just thoughts:

I wonder how much buying power has been taken out of the economy from savers not making much on their money due to low interest rates over the last 6 or 7 years.

The SEC should check option trades in CMG the weeks before it crashed from 742 to 413, tainted foods in several different states, sounds like terrorist or short sellers to me. They should have done the same after the 911 twin tower attacks.

Follow the money, you might be surprised.

Trucking industry shipments fall off charts

K-Mart closing 64 more stores

Container ship companies beaching their boats and cutting them up for scrap metal, the business is dying

Fewer customers at all restaurants, you know? Americans don’t like to cook, things must be bad

Teenagers in poor cities selling sex for food

Tent cities popping up all across America for homeless people

Driving season is over, oil could see 30 again unless Russia and Saudis make a deal.

The list of good news I see is usually Bullshit.

Caterpillar Inc. (CAT) starting to lay off workers, a bellwether stock, in mining, farming and construction.

Sounds like a highway to hell to me.

Bullishness among traders hit an all-time high in august, meaning most shorts are covered. I am a seller, buy puts. It takes balls to go against the crowd.

I always felt that the rich will do anything and everything to protect their wealth, well they have, and we are still nowhere.

“Bulls make money, Bears make money but pigs get slaughtered”

This has been the most difficult year for trading that I can remember since my start on Wall St. in 1967, almost 50 years ago. I never thought I would live this long.

The best way to reach me is

marcello.anastasi@ymail.com

So long from  Peru.

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BLACK SWANS AND TIPPING POINTS.

August 20th wednesday I was sick for a week and a half.

RESILIENT Ah resilient! I don’t know why the fucking market is still up.

The news get worst and the market still up. We are still below my bearish call at 16,950. It seems like that’s all I see and hear.

Ever since I mentioned them in my first and second blog in late June. I want to thank my son Spider, he hates when I called him that. For giving me both books (Black Swans and Tipping Points) a few years ago.

I am starting to feel like Jesse Libermore who made and lost three fortunes, as the story goes. He committed suicide in  the men’s room of Oscar Del Monicos restaurant after losing his third fortune. He was called the Boy Plunger and the Great Bear of Wall Street. He made a $100 million dollars in the 1907 crash and a $125 million in the 1929 crash. You are talking about a billion dollars plus in today’s world.

I found his book “Reminiscences of the Stock Operator” early in my career there was a Strand book store across the street from my firm at 57 Water Street Downtown Manhattan. I had to pass it while walking to the subway to get home.

They had the new books inside. When the weather was nice they would put tables outside filled with used books and old books. I use to love to browse through them. That where I found and bought Libermore’s book. Try to get it. It is a great read.

I mentioned Black Swans and Tipping Points only because I am a contrarian, now it seems half the world is getting as bearish as me. Another thing that bothers me is the Advance-Decline Line Chart starting to look better. I mentioned Libermore because he said the only time he lost money was when he broke one of his own rules. Which is what I am doing now, breaking my own rules.

I want to thank Zerohedge.com for showing an A-D Line Chart a few weeks ago on the web site. I think zerohedge.com is one of the superior web sites out there. And I also think that only a small percentage ever saw or heard of an A-D Line Chart.

I am changing my Market Call?  NO.

In fact I now think when this market breaks it would be a sound not only heard around the w.orld but around the universe.

I can’t stop listening Cold Play the CD with the colorful butterfly if you don’t think Latin love American music just go to you tube and watch there Rocking in Rio Concert from Brazil.

The last time I listening to a CD that much was in my younger years as a trader, the pressure on the job was too much most of my fellows’ traders either drank a lot or took drugs.  I was raising a family and didn’t want to go that route besides I am Pisces we are addictive by nature.

I’ve been smoking since I was 14. For the last 2 weeks I had the flu. It’s going around. It gave me a lung infection and I had to go on strong antibiotics, coughing my brains out.

Did I stop smoking or even cut back? NO. What a fucking idiot!

Being sick is also the reason I didn’t write my blog in two weeks.

Anyway I bought a work out bench two dumbbells and a barbell and weights and worked out 2 or 3 nights a week while listening to Dark Side of the Moon Pink Floyd. It works. I was the calmest trader on the desk. When I was sick I wanted to write about AG BECKER. Here it is.

You know you don’t realize it but you spend more time with the people you worked with than your own family. I love all the people I worked with at AG Becker, then AG Becker Warburg then Warburg Becker Paribas. When I started at AG Becker in 1966 it was a NY start-up office with only 40 people, the main office was in Chicago and they were around for almost a century.

Over the years the NY office grew from 40 to 4,000 people. Then one morning August 3rd 1984 to be exact all the managers from all the departments in the firm walked around telling the workers to watch Reuters news at 9 o’clock   am.

After 10 or 15 minutes it finally hit the tape AG Becker closed its doors. Dead silence. Everyone was in shock. I just sat there trying to absorb the news, 2 or 3 hours later people were passing by and saying Frank go out to lunch, go get some fresh air. I didn’t know what to do and never went out to lunch in almost 20 years. Traders were fed at the desk. Between making a market in 15 OTC stocks and executing orders you just couldn’t leave the desk.

That was Friday. Well about 4 hours later around lunch time I realize everyone left the floor. I wasn’t hungry. So I went outside and felt the midday sun for the first time in 20 years. I was scared. I left the building and sat on the nearest bench and lit up a cigarrete.

I close my eyes and said Jesus I just took out a big loan to buy a bungalow two blocks from the ocean at Rockaway Point that was between Breezy Point and Roxbury. My life dream. Isn’t life a bitch. I close my eyes again and said Please Jesus I need help. With that I automatically got up and start walking uptown for 5 or 6 blocks when I saw a bookstore I never notice before, walked in and like a guided robot walked three isles over make a right turn and about 1/3 down the isle I stopped, turned and looked at the books and my eyes and hands at the same time reached for a book that was called MIND CONTROL by Jose Silva. I walked into the cashier and bought the book. I walked back to the office and everyone was taking stuff from their desk drawers   and putting them in boxes. It was depressing. I wished everyone a nice weekend and told them don’t worry we all will have jobs in one or two weeks. Only because AG Becker was the first Brokerage Firm that I can remember that went out of business in the middle of a Bull Market, believe it or not almost everyone had a job but the end of the first week.

The S.E.C. I think push Merryl Lynch into buying and hiring most of AG Beckers employees because and this is how I heard the story. There were many stories at that time that AG Becker hires a hot shot Bond Trader from Merryl Lynch who after 2 months lost 8 million dollars. Then  the figure grew to 18 million dollars when all was set and done the final figure was 80 million dollars.That was just too much for a firm that size to absorb.

I started reading the book on the beach the next day and started practicing meditating for the first time on my life. Thank you Jesus for bailing me out again.

I just wish I could go back in time for just one day and go to work and see all the people that I loved. I miss all of you, even the not so nice ones.

Just thoughts

It took exactly 40 trading days for my 1987 crash call to happen. It is now almost 40 trading days from my June 24th bearish market call.

Final Note

One of the things that happened before the 87 crash was that the Japanese were buying US Real Estate and I think the Pan Am Building was bought at an outrageous price and now I hear that the Chinese are buying up Real Estate in Detroit at a crazy pace.

Next Blog

Water, water everywhere but not a drop to drink…. I don’t know who said that.

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