Recently, it has seemed like the market was looking for a reason to go up. Bad news was taken as a buying opportunity.
There was a change in market sentiment last week. The market finally found reasons to sell-off.
The move down was relatively minor and quite orderly. The S&P 500 is sitting comfortably in a support zone. The following chart shows that the move down did not come with panic selling and volume remained light.
The move back to support burned-off some of the excess exuberance. So, on the next push down, let's see if sellers get another bear trap sprung on them with a pop higher.
As I've said before, recently, if selling opportunities don't tempt sellers … Then the market will simply get pushed higher again.
Remember, a trend is in force until it's reversed. The broad equity indices are still behaving remarkably well. It could be a meaningful sign, or it could simply be a sign that there's a lot of money on the sidelines or in other markets.
Recently, it has seemed like the market was looking for a reason to go up. Bad news was taken as a buying opportunity.
There was a change in market sentiment last week. The market finally found reasons to sell-off.
The move down was relatively minor and quite orderly. The S&P 500 is sitting comfortably in a support zone. The following chart shows that the move down did not come with panic selling and volume remained light.
The move back to support burned-off some of the excess exuberance. So, on the next push down, let's see if sellers get another bear trap sprung on them with a pop higher.
As I've said before, recently, if selling opportunities don't tempt sellers … Then the market will simply get pushed higher again.
Remember, a trend is in force until it's reversed. The broad equity indices are still behaving remarkably well. It could be a meaningful sign, or it could simply be a sign that there's a lot of money on the sidelines or in other markets.
David Stendahl called me about Silver last week. A quick glance at the chart showed a major price drop.
How major? Well, after the big move up. Silver dropped over 27% last week, the most since 1975.
Technical traders will note that Silver was running into resistance at the 48.12 Fibonacci level. A week later, Silver is now resting at the 34.66 … which is also a Fibonacci support level. Stendahl points out that the Value Chart indicator has formed a pivot bottom suggesting that Silver is ready to find support. Traders will likely keep a keen eye on whether Silver can stay above the 34.66 level … otherwise, the selloff continues.
In This Case, Technical Analysis Doesn't Tell the Whole Story.
According to MarketWatch, retail buyers may have stayed invested in silver long after most hedge funds and other large investors had left.
Data from the U.S. Commodity Futures Trading Commission shows money managers’ bets that silver prices would go higher declined starting mid- February, when silver prices started to climb in earnest.
The trend suggests the so-called ’smart money,’ the large managed funds that report to the CFTC, had started to back away from silver and "retail investors picked up the slack,” said Tom Pawlicki, a precious metals analyst with MF Global in Chicago.
The CME Group, which operates the Nymex, had raised its margin requirement for speculative traders twice last week due to high volatility. These investors must now put up $14,513, per contract, for a day trade, and a further $10,750, per contract, to hold that contract overnight. Both requirements are up 24% from a week ago. For investors holding hundreds of contracts, that's a difference of hundreds of thousands of dollars.
Silver is much less costly than gold, but gold's margin requirements are less than half of silver's. The higher margins are a deterrent to new investors looking to enter the market.
Apparently, to manage its exposure during the parabolic move higher (and the shift from 'Smart' to 'Dumb' money), MF Global (which is one of the big Futures trading houses) raised its margin requirements significantly higher than the CME did. MF Global, run by former Goldman CEO Jon Corzine, hiked its silver margin to $25,397. Consequently, MF Global's margin requirement is 175% of the CME's requirement. The result … a rush to exit.
David Stendahl called me about Silver last week. A quick glance at the chart showed a major price drop.
How major? Well, after the big move up. Silver dropped over 27% last week, the most since 1975.
Technical traders will note that Silver was running into resistance at the 48.12 Fibonacci level. A week later, Silver is now resting at the 34.66 … which is also a Fibonacci support level. Stendahl points out that the Value Chart indicator has formed a pivot bottom suggesting that Silver is ready to find support. Traders will likely keep a keen eye on whether Silver can stay above the 34.66 level … otherwise, the selloff continues.
In This Case, Technical Analysis Doesn't Tell the Whole Story.
According to MarketWatch, retail buyers may have stayed invested in silver long after most hedge funds and other large investors had left.
Data from the U.S. Commodity Futures Trading Commission shows money managers’ bets that silver prices would go higher declined starting mid- February, when silver prices started to climb in earnest.
The trend suggests the so-called ’smart money,’ the large managed funds that report to the CFTC, had started to back away from silver and "retail investors picked up the slack,” said Tom Pawlicki, a precious metals analyst with MF Global in Chicago.
The CME Group, which operates the Nymex, had raised its margin requirement for speculative traders twice last week due to high volatility. These investors must now put up $14,513, per contract, for a day trade, and a further $10,750, per contract, to hold that contract overnight. Both requirements are up 24% from a week ago. For investors holding hundreds of contracts, that's a difference of hundreds of thousands of dollars.
Silver is much less costly than gold, but gold's margin requirements are less than half of silver's. The higher margins are a deterrent to new investors looking to enter the market.
Apparently, to manage its exposure during the parabolic move higher (and the shift from 'Smart' to 'Dumb' money), MF Global (which is one of the big Futures trading houses) raised its margin requirements significantly higher than the CME did. MF Global, run by former Goldman CEO Jon Corzine, hiked its silver margin to $25,397. Consequently, MF Global's margin requirement is 175% of the CME's requirement. The result … a rush to exit.
“In times of war or uncertainty there is a special breed of warrior ready to answer our Nation’s call. A common man with uncommon desire to succeed. Forged by adversity, he stands alongside America’s finest special operations forces to serve his country, the American people, and protect their way of life.
I am that man.
My Trident is a symbol of honor and heritage. Bestowed upon me by the heroes that have gone before, it embodies the trust of those I have sworn to protect. By wearing the Trident I accept the responsibility of my chosen profession and way of life. It is a privilege that I must earn every day.
My loyalty to Country and Team is beyond reproach. I humbly serve as a guardian to my fellow Americans always ready to defend those who are unable to defend themselves. I do not advertise the nature of my work, nor seek recognition for my actions. I voluntarily accept the inherent hazards of my profession, placing the welfare and security of others before my own.
I serve with honor on and off the battlefield. The ability to control my emotions and my actions, regardless of circumstance, sets me apart from other men. Uncompromising integrity is my standard. My character and honor are steadfast. My word is my bond.
We expect to lead and be led. In the absence of orders I will take charge, lead my teammates and accomplish the mission. I lead by example in all situations.
I will never quit. I persevere and thrive on adversity. My Nation expects me to be physically harder and mentally stronger than my enemies. If knocked down, I will get back up, every time. I will draw on every remaining ounce of strength to protect my teammates and to accomplish our mission. I am never out of the fight.
We demand discipline. We expect innovation. The lives of my teammates and the success of our mission depend on me – my technical skill, tactical proficiency, and attention to detail. My training is never complete. We train for war and fight to win. I stand ready to bring the full spectrum of combat power to bear in order to achieve my mission and the goals established by my country. The execution of my duties will be swift and violent when required yet guided by the very principles that I serve to defend.
Tradition. Brave men have fought and died building the proud tradition and feared reputation that I am bound to uphold. In the worst of conditions, the legacy of my teammates steadies my resolve and silently guides my every deed.
A small software company, started by a friend of mine, just did something that surprised me. It bought a new iPad for each of its employees.
Some companies will justify purchasing an iPad for key executives as a consumption tool. Other companies may justify purchasing an iPad for a developer, as a way to get them used to the form factor. Still other companies may purchase iPads as an incentive to recruit or retain employees and to foster a sense of a "cool" environment.
This Time It Is Different.
What strikes me is how fast this wave of tablet computing is taking-off. Yes, I remember how many times companies have tried non-traditional PC initiatives. In fact, my attic is an electronics graveyard for many of the earlier attempts. However, this time is different. I see 60-year-old men in McDonald's using and iPad to play Scrabble. I see 50-year-old business-people doing their work using iPads on an airplane. Moreover, I see data being formatted for easier consumption on those devices.
The result is that this probably represents a fundamental change.
Back in the 90s, the Internet finally took off. Early adopters talked about how long they were doing similar things with AOL, CompuServe or Delphi. Yet, when the Internet finally took off something changed.
Would you have guessed that a decade later electronics chain stores (like Circuit City) or bookstores (like Borders) would be casualties? Think how it affected the U.S. Post Office, telephone companies, etc. The list of winners and losers from that shift can be a lesson or an example.
A Different Look at the Same Issue.
I grew up with LP records. In high school, I watched eight-track tapes give way to cassettes. Then CDs gathered market share. After that, MP3s came along. Something funny happened along the way though … An MP3 file is just a song; but modern MP3 players allow you to carry your entire music library with you wherever you go. It's not just a linear progression; something happened and the whole value proposition transformed.
We are watching a similar technology shift happen right now. To borrow a line from Sun Microsystems, "the network is the computer".
More of our data, applications, and services are moving to the "Cloud". And a tool like the iPad can become much more significant than merely the device itself. It becomes the portal giving you access to everything on your company's private computers, as well as what's available on the public Internet. Again, the whole value proposition transforms.
A decade from now, there will be a whole new list of beneficiaries and casualties from this quantum shift.
Something to think about; who will be the big winners and losers?
