Monthly Archives: June 2011

Google Consideration…

Since nobody is sending me an invitation for Google+ I’m working on a couple ideas. I’ve been watching $GOOG bounce off their lows at 475 and over the last few days move up to 505.

Taking the highs of June 1st and the lows of June 27th we’re sitting at 50% and bumping up against a 200 day EMA (which for some reason doesn’t show up on the image).

The longer term trend is still downward though.

Butterfly 490/505/520


Put Ratio Spread 2:1 490/510

The second option appeals to me because of the longer term trend. Let me know what you think.

Graffiti and Order

Had to be on the road this morning and I saw this wall. My question is why is it so orderly? The French can’t stand in a line properly but each ‘tagger’ politely keeps to his/her space without bothering his neighbor. I find this just a bit strange…

I’ll have a closer look at the market a bit later, but the CAC40 (at least) is optimistic about the Greek vote today, even with reported declines in consummation.

And speaking of “tagging”, the EUR.USD just tagged the 1.45 mark, a nice resistance level, and a good opportunity. Au moins… Short term.

Greece, Goldman and Google

This is probably the best article I’ve read about Greece recently. It calls into doubt the privatisation plan. Here’s another from France24 which has a decent human perspective.  The vote should be happening in about 2 hours and the European markets are up over 1%. My guess is that this will be a sell the news event. If you’re interested in the austerity details this is a good link.

We should have the result before the European markets close and at the opening of US markets. I think we’ll see some strong pull-back almost immediately after the vote.

“…there will still be a risk of lawmakers rejecting detailed austerity bills in votes on Thursday on the implementation of different elements of the plan, such as tax rises and the sale of state assets.”

If that pull-back doesn’t happen today, we’ll see it happen before going into the weekend. I’m cautious today, maybe too cautious.

I’m concentrating on $GS and $GOOG today. Both of these charts show strong decending channels.

Goldman on increasing volume.

There’s also some chatter about transitioning to consumer staples, I think this is also worth some study.

Goldman Sachs Put Backspread

This is a trade I’ve been working on since $GS was at about 150. I think it’s still relevant today.

Selling 2 July 140 Puts
Buying 4 130 Puts.

Judging from the downward trend we have some good momentum and given some unforeseen good news and a strong pop to the upside we’re relatively well protected.

Case Shiller and Consumer Confidence

As I try to refine a decent trading strategy, I look at these numbers. And they’re not reassuring but the markets are up about 1% across the board. The Euro is strong (really strong), though it couldn’t quite hit 1.44 this morning. We’re expecting the IMF, ECB, and the EU in general to firmly support Greece. Fair enough. I think today though we should expect the unexpected. I wouldn’t be surprised if this morning rally doesn’t hold up through the day.

So it’s a question of ‘time’, and my expectations that weak employment, housing, banks, and sentiment, should have a negative effect on the markets. The question is, then, when will these factors hit the markets? Or how do I play these distractions? What others can we find? Will IEA1 and Europe’s problems distract us long enough to see housing and/or employment rebound?

I have some decent mysteries in my portfolio. Starbucks ($SBUX) is one, Starbucks was stuck in a range and has broken out, Google ($GS) arguably is trending down but is showing strength. Linked-in ($LNKD) is equally perplexing to me.

Capital Ratios on the Upper East Side

This reflection will surely sound naive. Maybe it is, but this commentary by George Soros (80) irks me.

“We are on the verge of an economic collapse which starts, let’s say, in Greece, but it could easily spread. The financial system remains extremely vulnerable.” OK already. I swear to ignore anything written, replicated, or said by George Soros from now going forward.

At the same time our unbiased press and bullish stock forecasters tell us fundamentals are still looking good. Excellent. Optimism will return with earnings. Only the really cynical make us laugh!

And according to some guy named Dick Bove, European banks apparently will need higher capital ratios. Someone is inducing global recession. It wouldn’t be George Soros would it? Super.

If I was still sitting in New York, consulting for our “best and brightest”, I’d be looking at all this and be saying, “Jeez the Euro’s in for it, the EU is in for it and the Dollar must be pretty safe.” I’d be thinking, Greece DEBT to GDP reminds me of apartement prices on the Upper East Side. 

I’ve been camping out in Europe for about 10 years now, mostly consulting for Europe’s “best and brightest”. Here’s what is materially different. Europeans have always saved more, earned less, eaten better, and smoked more. Banks are painfully conservative, even to the point of being paranoid. So back to ‘higher capital ratios’: Country by country there’s some obvious DEBT:GDP ratio issues, but on the whole “Europe” is a conservative band of elitists who worry A LOT about how to protect their relevant domain. This is true for retail, private, and investment banking.

I think the Euro and the EU has some tough problems to solve, but it seems to be just a distraction. Apartment prices on the upper east side have hardly budged… One of these days I’ll put a slide in my apartment

Friday Sentiment and IEA Politics

Greece is moving onto the backburner and Italy starts to take it’s place.

The EUR.USD is looking for direction but reacting to the durable goods number.

Politicians are keeping their heads down as they setup their play yesterday evening with the oil reserve release. The talking heads are calling it IEA 1 and surprise, the industry is telling investors to ignore the news! A slush fund, manipulation, etc.

Blah, blah, blah.

The states and FTC are looking to cash in by attacking Google. Microsoft anti-trust flashbacks, come to mind.

Oracle earnings dissappoint on hardware sales and the old Sun acquisition debate comes up again. Say they don’t want to do any deals right now. They’ll be buying $RIMM before we know it…

Are you kidding?

GoDaddy for 2 billion, right…
Alstom signs a deal with Iraq for a high speed train between Bagdad and Bassora…

Insider trading on Apple, Netflix, Ciena, Qualcomm… $AAPL, $NFLX