Tag Archives: Initial Jobless Claims

Markets Rebound- Note That Economic Data Releases in Asia Have Been Postponed

HedgeFundLIVE.comMorning Notes

- Asian markets closed down and Nikkei was very volatile, down as much as 5% at one point
- However, Nikkei recovered off LoD to close down 1.4%
- Hang Seng closed down 1.8%, Shanghai Comp closed down 1.1%
- Major blackout in Tokyo is probable
- Japan may use military to pump water to the No. 3 reactor
- U.S. gov’t aiding U.S. workers move from affected areas in Japan
- Note that economic data that is normally scheduled in Asia have been pushed back
- Crude off to a strong start
- Dollar weak
- Update in Middle East: UN agreed on draft resolution to impose no fly zone over Libya, which will be voted on later today
- The U.S. has voiced support of no fly zone and also said that UN should be ready to consider next steps (beyond no fly zone implementation)
- Situation in Bahrain not improving it seems- six opposition activists were arrested by Bahrain gov’t; also Bahrain imposed a curfew and warned people not to gather in public places
- February Core CPI: +0.2% vs. +0.2%
- February CPI m/m: +0.6% vs. +0.4%
- Initial Jobless Claims: 385K vs. 387K; prior revised up to 401K
- Continuing Claims drop to 3.706M from 3.786M
- February Industrial Production: -0.1% vs. 0.6%
- S&P futures were open 20 handles from FV ahead of the open


Trader Rehab Again - I take my book down to zero

Trader Therapy - I got screwed

I was wrong. The market did not pull in and my thesis did not play out as I expected it to. Perhaps the lesson is, a bull can’t morph into a bear. Perhaps the position was too big relative to the risk.  The most difficult rule a trader needs to live by, is never do anything today that jeopardizes your business tomorrow. As such while I have been looking for a pull back in the market for 2 weeks, and was able to maintain a relatively small loss in the face of a strong upward trending market, I could not survive Friday without breaking the aforementioned rule. As I entered the day Friday, it appeared as though all my patience would pay off. I had called right that Mubarak would not back down, and the market was selling off. And then an utter reversal, Mubarak changes his mind less than 24hrs later. This is what I have referred to as a complete exogenous shock. Unfortunately for me, who was quite bearish, this took me by total surprise and to a threshold of pain that I would endure no further. I did what all career traders do under those circumstances; I liquidated all positions and cut down to zero. When you are wrong as a trader and have reached your pain limit, continued misperception that you will be right and further losses are not acceptable, even if the very next day you would have been absolutely correct. While I took a significant trading loss on Friday, my firm remains strong and can begin its battle back to make up for Friday’s trading loss. And while it may take time to make it back as the risk will be paired down significantly, I will find myself in what I refer to as trader rehab. I will step away from the keys for a week or two. When I return, I will trade small as I attempt to regain my confidence.  Hopefully the other traders will rise to the occasion and start our path back toward success. I will focus on the business as a whole. The business on a whole is thriving. Its success far exceeds the trading loss. Trading losses can be recovered relatively quickly. Business success cannot afford to give ground. When you are an entrepreneur like myself, there is an inner force that keeps you moving forward in the face of adversity. You do not look past with regret, you look forward with newfound knowledge. A survivor in this business always rises to the occasion, always suffers setbacks and always rises again. I have suffered through many business and personal losses and celebrated numerous personal, trading and business triumphs. That has been my way for my entire career, my entire life. And probably the balance of what I hope will be a lengthy journey. I would venture to say, you the reader have had similar experiences. What defines us all, is “if and how we move forward”. The best way to see how my journey continues is to tune into hedgefundlive.com

Thursday Market Expectations - Reasons why the market doesn’t go down, for now.

NFLX - "Is it time to buy?"

Is this the beginning of the small correction I have been looking for?  Probably, but given the fight the bulls put up yesterday, they are not going to back off quietly. One might argue, buy the dips but sell the rallies more aggressively. I do not have the patience for that. I have too many other things to focus on. Either I am right and we will test 1300 in the coming days or I am wrong and we are in a fever driven hyper bull cycle that refuses to be broken.

But why? What are the positive catalysts? An improving economy. Yes things are slowly getting better. Perhaps you believe that there is still a great deal of cash to be put to work. I am not sure I agree with that one. Last I heard hedge funds were at near pre financial crisis levels of leverage and no matter how hard I try I cannot seem to get my credit card bills paid down, it is something that my wife and I are forever battling over. So near term, the catalyst for moving up is simply greed. “It worked yesterday, so I will try again today” seems to be the motto for the bulls.

As I write this it is 7:45am on Thursday and while futures indicate a negative opening on the heals of CSCO’s earnings (CSCO is trading down 10%) AKAM’s earnings (AKAM is trading down11%) TQNT’s earnings (TQNT is trading down 14%), I am amazed that the futures are not down more significantly. We await a weekly jobless claim number that should not move the needle. So here is my thesis, people have very short memories. I for one do not remember what I had for dinner when I came home last night, though I do remember polishing off a bottle of cabernet at the wine bar with a buddy, before I headed home for dinner. For some reason I think it was lasagna, but I really don’t remember. We as a species have short memories. Our memories are even shorter when it comes to recalling pain. Pain is the memory we most often repress, very logical. The traders, investors and financial spectators of the stock market, the greatest arena since the Roman Coliseum have repressed their fear, they trade with abandon as they rip the futures up 5 handles in the last 5 seconds of a day. They ignore the fact that we have not even tested the breakout “psychological levels” as support.

But I believe the time is upon us. The catalysts are not to be ignored. As I said earlier this correction will be a battle between two strong opposing forces. Leverage vs. Common sense. Fear vs. Greed. And finally a battle between the lessons of history vs. a brave new world where there is a new playbook, and perhaps my copy got lost in the mail.

Negative catalysts continue to be those I mentioned in yesterday’s Market Expectation blog. But let me add a few more. Unexpected developments in Ireland and Portugal. Forex spread gouging by major institutions. Bernanke under further attack over QE2. Our municipal bond infrastructure in jeopardy as the ratings agencies were once again, late to the game. I believe yesterday was the first right-handed body blow to the feverish bulls. Today will be a follow up cross to the left side of the jaw, the type where you hear a slight crunch, and tomorrow will be a right hook that will for the first time in months put raging bull to the mat, even if it is short-lived, at least he will remember that lost feeling of pain and markets will have an opportunity to normalize.

By the way my Aunt Beverly called me again last night, she wanted to know if i thought NFLX was cheap, needless to say i will be shorting NFLX.

Egypt Concerns Tempered, But Still on Investors’ Minds

Morning Notes

- Seeing bit of pressure in global markets this morning
- Nikkei finally getting a small pull back, closed down 30bps
- Note that in observance of the Lunar New Year both the Hang Seng and Shanghai are closed (Shanghai was closed beginning yesterday for the holiday)
- Eurozone Services PMI came in net better than expected
- UK Services PMI among those that came in better than expectations; note that their December PMI number somewhat surprising had shown contraction, which now in context with today’s solid number suggests that the December number might have just been a bad weather related blip
- Nonetheless, European bourses are generally lower- they have bounced off their morning lows though
- ECB left rates unch’d, as expected
- ECB Pres. Jean Claude Trichet held a press conf. at 8:30a
- Among other thing, Trichet said loan growth is still sluggish
- Trichet also mentioned that money mkts are showing signs of better functioning
- More key takeaways from Trichet’s speech: upward inflationary pressure due to energy and commodities, but prices should remain contained/in line w/ price stability in the medium to long term
- Crude is trading higher again this morning
- How crude is affected by Egypt situation: Egyptian PM tried meeting w/ opposition groups today, but some groups refused to engage in talks with him => speedy resolution doesn’t seem like it’s going to happen, which is raising concerns that there might be a larger disruption in the Suez Canal, i.e., oil supply would be impacted
- Separately, Egypt was downgraded by Fitch w/ a Negative rating watch
- Dollar is also up, adding pressure to futures
- S&P futures are down a handle from FV
- Initial Jobless Claims: 415K vs. 425K; prior revised up to 457K from 454K
- Continuing Claims fall to 3.925M from 4.009M
- Q4 Unit Labor Costs: -0.6% vs. +0.1%; prior was -0.1%
- Q4 Productivity: +2.6% vs. +2.2%; prior was +2.3%
- Other items on the calendar for today: ISM at 10a; December Factory Orders at 10a; Bernanke’s Speech at 1p

Japan Downgraded a Notch- Not Too Detrimental to Markets

Morning Notes

- Mixed action in the overnight session
- S&P downgraded Japan after their markets closed- initial pull back off that news, but has since recovered
- Weaker yen helped push Nikkei close green on the day, up 70bps
- Shanghai Comp had a nice day, up 1.5%
- European mkts mixed with no real catalyst to push stocks in either direction
- Gold is sporting small gains while crude is down
- S&P futures flat in the pre, on the S3 buy pivot signal
- Initial Jobless Claims: 454K vs. 410K; prior revised down to 403K from 404K
- Continuing Claims: 3.991M from 3.897M
- Latest jobless claims data pushed down futures
- Durable Orders: -2.5% vs. +1.5%
- Durable Orders Ex Trans: +0.5% vs. +0.6%
- Durable Orders number is somewhat disappointing as well, seeing that analysts were expecting an increase, not a drop
- Pending Home Sales at 10a
- 7 yr note auction out at 1p
- Note: NYMEX/COMEX will open at 10a due to snow in the NE region

A Wall Street Trader’s New Year’s Resolution 2011

Trading, Stock Market and Wall Street = writers block

I have had writers block for nearly a week. I had decided that my first Blog in the New Year would not be a traditional New Years Resolution blog; I could not find a single thing that I want to resolve. I did not want to put some silly list of humorous resolutions, such as I ”I resolve to not mix my Meds”.  I didn’t want to put a list together of common everyday resolutions such as “I will try having

Wall Street - A New Year

more date nights”. ……….With my wife or Marc Schwartz.

So………After hours of meditation…………………

I have a single New Years resolution, I am resolved to live each day in the present. I expect to experience 365 unique days. Too many of my mistakes from the last year were because I believed I could control tomorrow.  More importantly, they were because I arrogantly believed I had a clue as to what tomorrow had in store. Now before you stop reading, because you think this will be some self-reflective sappy shit blog, think about how this applies to your investing and your trading. For 6 months I have been bullish. I called for a 1275 2010 year end close on the S&P cash; I was off by about 25 points and one day, as we hit my level January 1st. And while I continue to be Bullish on the overall market as well as optimistic about the direction the world is going, none of that has anything to do with tomorrow’s trade.

Willian daley - Obama's New Year's Resolution

One of the most important objectives in this game, is to stay objective. Last year I was not objective. Objectivity is reality. My perception may be very different than the market, but it is the market’s view that is reality. I may believe a loss I have may turn into a gain, but reality is, it may not, and I must adhere to my risk limits. I can have an educated opinion, but only time will tell if it is reality. Truth be told, there is no such thing as an objective opinion, It is an oxymoron, moron. When you make an investment with a time horizon, what exactly does that mean? Who is to say one earning’s multiple is too high and another too low. Why did so many believe the euro was going to parity? Why did our market spend so much time in 2010 worrying about Europe? The sky did not fall. CDS spreads continue to fluctuate. The Dow is 17% off its all time high. That is just a few Flash Dashes away from a new high. And what about that Flash Crash thing? How can any trader believe they have an idea of what tomorrow holds in store when the concept of a flash crash exists? Every currency impacts the bond market, which impacts the equity markets, which impact the masses of IRAs 401ks and pensions, which impact all of you, which impacts the politicians. And what about the politicians? How can any trader be comfortable with “tomorrow”, when the president thinks he can change the rules on a daily basis? No more proprietary trading. No more shorting? Oh, just not in the shitty stocks. And what about

Shit, Shit, Shit, and Goldman Sachs

the word shitty? During the senate hearings villainizing Goldman Sachs, Senator Levin referred to Goldman as “Shitty, Shitty, Shitty”. Maybe he doesn’t realize that some of us like to watch C-span with our kids. And what about C-Span and the 1,000 other channels, Internet, and numerous other media outlets? We are bombarded with information. None of us can actually decipher it. The technology changes so rapidly that it is impossible to know which one will be in business tommorow. One year ago, I thought “THE CLOUD” was where God lived. And what about God, is he out there? You know what? I wont go there. I wrote in an early 2010 blog that I thought the market had systemicly changed. I was wrong. The market never changes, only the players change. I am a changed man.  Shit, that really sounds cliché. For many years I believed people couldn’t fundamentally change. My one new year’s resolution is to fundamentally change. Yes, I now believe that a person, given the right discipline and enlightenment can change fundamentally. My new year’s resolution will

Cloud Technology - Where is God

manifest itself in both parts of my life. The only two parts a real Wall-Streeter has, family and business. And for many a Wall-Streeter the line is particularly blurry. I expect to see every day with my family as both a blessing and a testament to all that I have accomplished. I expect to live every day of the business as a new challenge in the game, a new scene in an unseen movie or a new chapter in an unread book. I guess I am going cliché. Very sappy, I apologize. But I believe that the player has changed. I can no longer rely on skills honed during bygone years. It is time to embrace a new style of living and a new strategy in the game. Day by day. Moment to moment. As we survive, we grow stronger. As we embrace the moment, we secure the future. I can no longer waste a day thinking about tomorrow. I need to end the day thinking about all that I accomplished. I need to see a day as a building block for the future. I need to see the trade in the moment and the business as it is today. Maybe a time will come when the future can be planned, but that is not today and more importantly it is not tomorrow. Play the game like you are in the midst of the battle and then hopefully the war may ultimately be won. I once believed  trading was a long-term strategy. I now understand it is a series of short-term battles in an ongoing war. I once believed a business was methodically built over an extended period of time. I now understand that business is “ten percent luck, twenty percent skill, fifteen percent concentrated power of will. Five percent pleasure, fifty percent pain and a hundred percent reason to remember my name”. (Fort Minor – Remember the Name) I now understand that I am in control of neither but capable of succeeding at both. My new years resolution is simple, I will truly embrace the moment, I will let go, and I will fundamentally change.

Jobless Claims at Lowest Level Since July 2008, But No One Seems to Care

Morning Notes

- Noteworthy overseas mkt action was in Nikkei, which closed down 1.1% with weakness attributed to strength in the yen
- Nikkei will be closed tomorrow so today was year end trading for the Japanese index
- Comments out of China from the PBOC around potential for more rate hikes in the first half of 2011; also mentioned that appreciation of the yuan would help the Chinese economy, not harm it
- Quiet trading in Europe again and indices there are down small

Best Jobless Claims Number, But No One Cares

- Commodities are flat
- Dollar is weak again
- S&P futures are pretty much unch’d
- Initial Jobless Claims: 388K vs. 416K; prior revised up to 422K from 420K
- Continuing Claims: 4.128M; prior was 4.071M

- Initial Claims number of 388K is actually the lowest level since July 2008, so certainly a positive sign for the economy
- S&P futures not reacting too much to the claims number release
- Remaining on the economic calendar for today: Chicago PMI @ 9:45a ET; Pending Home Sales @ 10a; Crude/Gas Inventories @ 11a
- U.S. market will be open all day tomorrow; note that the Japan and Korean markets will be closed tomorrow and the Uk, France, and Hong Kong will have a half day

If You Are Trading Today, You Will Probably Contribute 1/10000 of Today’s Volume

Morning Notes

- Overseas mkts mixed in the overnight:
- Asian mkts closed down (-20 to -80bps)
- Meanwhile European mkts have seen mixed action thus far

City Around The Holidays

- Irish gov’t confirmed plans to take control of AIB, according to CNBC
- November Durable Goods Orders: -1.3% vs. -0.6%; prior revised up to -3.1% from -3.3%
- November Durable Goods Ex Trans: +2.4% vs. +1.9%; prior revised up to -1.9% from -2.9%
- Initial Jobless Claims: 420K vs. 420K; prior revised up to 423K from 420K
- Continuing Claims: 4.064M, down from 4.167M
- November Personal Income: +0.3% vs. +0.2%; prior revised down to +0.4% from +0.5%
- November Personal Spending: +0.4% vs. +0.5%; prior revised to up +0.7% from +0.4%
- November PCE Prices m/m: +0.1% vs. +0.1%
- We do have some additional economic data out today including UMich Sentiment @ 9:55a ET and New Home Sales @ 10a
- Expecting not much reaction (or action) in the mkt following economic numbers
- Bond mkts close @ 2p today
- S&P futures pulled in below S3 a little past 8a
- S&P futures are down 1.75 handles from FV

Light Volumes + No Pivot Signal Generated = Indecision

Morning Notes
- Light volumes in the overnight
- Hang Seng down the most, closed -1.3%, on concerns over monetary policy measures (Shanghai Comp down 50bps)

Indecision in the Market

- China and Hong Kong upgraded (Asian mkts were closed already when the announcement was made)
- German and Eurozone Manufacturing PMI came in better than expected
- UK raised 2011 inflation forecast, as expected
- Commodities have been fairly quiet this morning
- FDX reported an earnings miss this morning, pulling in the futures as well
- S&P futures traded right up against R3 just before FDX earnings
- S&P futures not on a pivot signal this morning, trading between S3/R3
- Initial Jobless Claims: 420K vs. 425K; prior revised up to 423K from 421K
- Continuing Claims: 4.135M from 4.113M
- November Building Permits: 530K vs. 560K; m/m chg: -4.0%
- November Housing Starts: 555K vs. 545K; m/m chg: +3.9%
- Futures not reacting to data releases
- Philly Fed number out at 10a ET

Jobless Claims Picture Appears to be Improving- Futures Push Higher

Morning Notes
- Overseas markets are mostly up this morning save for the Shanghai Comp, which is down about 1.3%
- Weakness in China attributed to rate hike rumors (again) potentially to come this weekend
- China canceled its 3-yr bond auction that was scheduled for today
- In Japan, Q3 GDP was revised; meanwhile,

Jobless Claims Picture Appears to be Improving

there are concerns of contraction for Q4
- Also, machine orders in Japan came in solidly
- ECB monthly bulletin came out, noting new there though
- BOE kept benchmark interest rates unch’d at 0.50%, expected
- Fitch downgraded Ireland
- Euro showing weakness this morning
- Strong jobs data out of Australia (came in more than double the consensus)
- Treasuries recovering a bit today after a few days of weakness
- Wholesale Inventories is the only item left on the economic data calendar today, to be released at 10a ET
- 30-yr bond auction results out at 1p
- S&P futures up small ahead of claims data
- Initial Jobless Claims: 421K vs. 425K, prior revised up to 438K from 436K
- Continuing Claims: 4.086M down from 4.427M
- Futures push higher off claims number
- S&P futures are now up 6 handles from FV, trading on the R4 buy pivot signal