Nov 18: Markets poised for advance

As for markets prepare for an advance from the short-term oversold level that has resulted from the last fortnight's shedding of risk, I'd like to briefly point out a firm with a strong story: Textron.

The maker of Cessna aircraft and Bell helicopters has received a boost to its business from Chinese lifting of restrictions on civilian aircraft. (For instance, see "China to open airspace to civilian aircraft", FT, 11/15). Yet, the stock has barely registered any upside from this news, and furthermore, closed yesterday at a quite attractive price level v/v technical analysis considerations. The chart follows:

Nov 16: A sharp reversal

Markets contracted sharply in today's trade, with some securities coming into significant support areas. Contrarian bulls are whetting their appetites. But the broad outlook is more uncertain than bullish, as evidenced by, for instance, /ES.

In brief, /ES exhibited an unambiguous break through the price channel support of the post-summer rally. Such a movement portends further value deterioration in the weeks ahead, although not necessarily immediately. Indeed, the index looks oversold at the moment, and challenging 1225 is not out of the question, perhaps in a head-and-shoulders pattern, which is a classic topping formation. Here's the latest chart:



In the realm of individual securities, MRK and BIDU are two of many that standout. The drug maker is plowing quickly into what promises to be significant support; let's keep it on our radar screens as a potentially strong contrarian buy, should price hit the top line of the downward-sloping price channel. As the price channel is sloping in the same direction as price movement, the touch would be a "kiss of death", which has higher probability of repelling the movement.



The Chinese tech firm BIDU, meanwhile, is pulling back from a particularly strong advance in recent weeks. Indeed, while many leading stocks and whole market sectors have been stuck in the mud over the past few years, BIDU continues to advance in seemingly unstoppable fashion. A two-year chart of the security speaks volumes. But, to refer again to the 180-day panorama reproduced below, the current $103.5 support does not seem particularly durable. Additionally, the sharpness of today's 5% markdown -- a definite distribution day, in IBD parlance -- does not bode well for BIDU bulls over the upcoming weeks.



To end on some broad-market summary statistics, here is their representation: S&P500, 1178, down 1.6%. DJIA, 11024, down 1.6%. NASDAQ, 2470, down 1.8%.

In recent travels, a notable coincidence

On Friday, November 12, an American Airlines B737-800 took off from Washington's Reagan airport bound for DFW, experienced a cargo hold fire indication while climbing through FL260 (i.e. 26000 feet) some 60 nautical miles west of Dulles airport, and performed a diversion to Dulles, landing safely 26 minutes after wheels-up. The flight departed DCA at 8:43am.

And with apologies about the self-centeredness of this post, here is its meat: I, too, departed Washington at 8:43a on Friday, November 12, albeit from Dulles airport, aboard a United B757-200 bound for Los Angeles. Incidentally, I was listening to Channel 9, the live feed of air traffic control communications; however, I heard nothing about the AA diversion, possibly as I may have tuned to a music channel soon after take-off.

The bottom line: it's a small world. And I might do well to occasionally consider that transcontinental transportation, while very, very safe, is nonetheless inherently risky.

Nov 11: Veterans' Day trade

With apologies to the discerning reader about the vague, content-less title of this post, I shall proceed into just as disjointed a data dump of some of the day's action.

First, a DJIA component had a veritable repeat of May 6th's Flash Crash in the final minutes of today's trade. Here are the smouldering remains:



I haven't yet seen any headline explaining the precipitous decline. [Addendum: Poor headline earnings numbers were the catalysts. The conf. call, which could either fortify the bears or spur on the bulls, is presently ongoing, as of 4:45p EST]. And vertiginous it certainly was: the $35.15 nadir marked a near-instant erasing of all gains since October 25. Put another way, the volatility of the last hour (i.e. the size of the hour's bar on a candlestick chart) exceeds that of any hour-long period in the past 180 sessions.

Second, take a look at XOM, no mere minnow given its status as largest market cap firm (per my possibly imperfect recollection) in the modest marketplace that is Wall Street. Dizzying, seemingly irrational, propelled by ask-questions-later fast fingers: the Exxon chart bears resemblance to that of DIS. Yet the direction is opposite. And how interesting that the curiously anthropomorphic psychology of markets can create a bipolar-eque bifurcation of emotion in two sister-stocks of the Dow Jones Industrial Average! (Granted, the time frame of the respective moves is dissimilar.) The chart follows:



I cannot omit the most important anomaly of today's trade: CSCO. A DJIA component too, the networking maker plunged 16 percent on a cut in its sales forecast; the chart follows:



As for the broad market, /ES printed 1211.5 at high noon in Anchorage, which corresponded to settlement of the S&P500 at approximately 1214, a change of -0.4%. The DJIA ended at 11283 (down 0.7%) -- and weighed down by CSCO and DIS -- while the NASDAQ closed at 2556 (down 0.9%).

Nov 10: An ascetic no more

After too long a hiatus, I have carefully recommenced formal re-engagement with that unforgiving but exhilarating world of relative value; I've entered a trade. The above chart depicts the security along with the analysis. And though the price channel is hardly rocket science -- indeed, it is remarkably simple -- the casual reader must bear in mind that uncovering such an elegant opportunity as this requires searching through countless charts. Further buttressing my decision to risk a long-side trade is that, at the approximate end-point of the above chart, /ES was approaching a test of the pivotal 1200 level from above, the first test of this level since breaking through last week. And, needless to say, the virgin test is usually repelled.

With regards to the above chart, violation of approximately $66.3 would trigger a stop, while $67.9 or $68.3 would make sound profitable-exit points.

Incidentally, this morning's strong sell-off in Boeing shares -- and this is news only to those readers on the planet Mars -- is chiefly caused by an emergency evacuation of a 787 test aircraft (ZA002) yesterday after eruption of a small on-board, in-flight fire.

United Express operation at DCA is less reliable?

Disclaimer: This post shall dive rather unabashedly into speculation and extrapolation from anecdotal evidence. In addition, the author harbours personal displeasure towards the "Express creep" into what until recently was an all-mainline United Airlines operation at DCA, the reasons being at least three-fold: 1) compromised service offerings of the regional operators v/v mainline service, e.g. a lack of live air traffic control audio (Channel 9), or any other audio options for that matter; reduced overhead bin space; reduced offerings in the forward cabin; 2) a perception of diminished reliability, as regionals operate with thinner scheduling buffers and reduced availability of spare (i.e. potential substitute) aircraft; and 3) a perception that reduced crew hiring requirements and comparatively Lilliputian pay negatively affect safety.

**

In checking the status of today's DCA-ORD flights on united.com, your fearlessly inquisitive author discovered a 55 minute departure delay on today's UA 7670, the scheduled 6am operation on DCA-ORD (which used to be UA 601 with mainline service...). In seeking to understand the operational implications, consider the following four facts: 1) yesterday evening's sole United Express (UAX) operation into DCA, UA 7669 (ORD-DCA, scheduled 7:05p-9:55p), was cancelled; 2) the aircraft operating UA 7669 makes a RON (remains overnight) at DCA and operates UA 7670 the following morning; 3) Shuttle America, operator of the UAX service at DCA (and owned by parent company Chautauqua Airlines), ferried an Embraer E70 aircraft this morning from CMH (Columbus, OH), which arrived at DCA at 6:08am and, by logical argument, must have provided the aircraft for this morning's delayed UA 7670; and 4) upon arriving at DCA on UA 600 earlier this week (at approximately 9am), I noticed that UA 7670 was cancelled (the E70 was still parked at a gate adjacent to that which my B757 would occupy), while the morning's mainline service to ORD all seemed to operate.

With apologies about the non- reader friendly format of the extended argumentation above, that is to say, about the decided lack of conventional punctuation, some closing points: 1) The above evidence is, admittedly, anecdotal and non-rigorous, particularly in regards to point 4, where I didn't even provide the superficial context that I at least afford to consideration of today's flight in points 1-3; 2) Cancelled flights and empty aircraft ferries are a normal occurrence in this industry; 3) That UA / UAX would ferry an E70 on CMH-DCA, instead of simply cancelling DCA-ORD and revenue-flying the aircraft on CMH-ORD, hints at concern about minimizing passenger disruption, which is laudable.

That said, the complexities of reliable United-branded operations on DCA-ORD and v/v would be minimized with all-mainline operation. To say nothing of my objections to outsourced "Express" operations a priori.

So go out, loyal constituents, and write the Customer Relations department at your preferred airline, demanding maximization of mainline service and minimization of the ironically-labeled "Express" variety! Don't pay any heed to how deceptively attractive the little bundle of aluminum, scrubbed all nice and clean, might look!

Scatter-brained, high-flying story-telling

Dear foolish readers, er, reader: (for you could be consuming something worth your time)

What follows is a true story, in the full spirit of the word 'true.' It not only truly happened, but the chronicle was truly written but minutes after the event, taking the form of an email that was instantly dispatched from the wireless device it was crafted upon, just as the wireless device encountered (naturally enough) a wireless signal, upon its carrier's reaching the terra firma of a runway at Chicago's O'Hare International Airport. I risk a lawsuit -- just as I had with the previous post; what lengths I go for my readership of no one! -- with what follows, as it was intended as privileged communication to the message's original recipient, not for posting upon every iPhone from Dakar to Dolny Slask, every LCD from Virgin America's seat-back variety to, well, the point is made.

Date: Unification day (no, not October 3, but the First of this month, when CO and UA, having said "I do," giddily stole away into the Red Carpet -clad Presidential Club suite for, well, I might have some youngin' readers here. No, of course I don't, who am I kidding.) Airbus even celebrated with a full-page advert in the Financial Times: (apologies for the poor readability; blame the iPhone camera)



Place: the District

Time: early afternoon

The deets --

**

Man oh man, today's airport arrival experience was among my most dramatic ever! Read on; I write from aboard UA 621, presently some 24 minutes into the DCA-ORD sector.

I arrived in Rosslyn at 1:30p as expected, and I was descending the long elevator shaft for the Metro moments thereafter, in possession of Peugeot road bike, Samsonite roll-aboard, and Briggs and Riley backpack. (The bike would serve as my get-away vehicle upon returning to DCA a few mornings later, thereby beating the gridlock automobile traffic on the roads and bridges into central DC.) And then the fun started.

Sure enough, the blue line departed just as I arrived on the platform via elevator, and the next would come only after the obligatory and interminable (and unacceptable) midday wait. The next DCA-bound subway rolled into Rosslyn around 1:50p.

Once on the Metro platform at DCA, a sprint to the elevator proceeded, followed by discovery of a new route to my usual Peugeot lock-up spot, adjacent to the US Airways hangar. I kissed the maddog (my term of endearment for the fine wheels) good-bye, and continued to run (and sweat - yes, it's unpleasant but true!) into the terminal and up to the terminus of a shockingly lengthy queue for priority security screening. The time was 2:15p. My scheduled departure time was 2:35p; hence, doors would close in ten minutes. The wait to get to the ID checker appeared to be a good 15 minutes. That would not do.

Eschewing all semblance of elegance, I got the attention of a non-TSA line attendant and pressed my case, underscoring that my qualifications for the premium lane were not only elite status, but F-class (achieved through upgrade) to boot. :) And it worked! I was escorted about two-thirds of the way forward, and I furthermore "pardoned" my way past another 10% of the line. My wait thereby reduced to three or four minutes, I was through the checkpoint by 2:21. What good fortune!

I decided to double my bet. I could have easily walked to the gate - I was in possession of a luxurious quantity of 4 whole minutes, after all! - but decided to hit the restroom and change into some fresh clothing. Bear in mind that, at this time (and pardon the directness), sweat was beading down my neck, and I was feeling positively disgusting. No sooner than I'd entered the restroom, I heard "final boarding call, United 621!". But it was only 2:22, and I was determined to take full advantage of my remaining 180 seconds.

I finished my sartorial task most expeditiously and emerged into the male-female-combined world at 2:23p. I was at Gate 31 while my phone still displayed 2:23 (it would tick to 2:24 a few seconds later). The door to the jetbridge was open, the jetbridge was still attached to the New Colours A319, but there were no agents in sight! Finally, just over a minute later, after waiting patiently (what else could I do?!), I saw the jetbridge begin to detach. And an agent made an appearance. "Excuse me," in said. No response, not even a turn of the agent's head or eyeballs, despite being about two feet away from me. "Excuse me," I tried again, and still no acknowledgement. I could already see the angry email to United's Customer Relations that I would subsequently compose. But then, unexpectedly, a helpful query: "oh, are you on this flight?" Why, yes. Why else would I be standing at the jetway? I show my boarding pass and the demeanor improves further. I'm invited down the jetway in no time.

Now firmly ensconced within the aluminum skeleton of the jetliner, one further adventure awaited that momentous half-hour. I saw someone occupying my 2D. And I was told to gate-check my Samsonite. I do not admit this with pride, but the seasoned traveller within suddenly made a full-on appearance. I stubbornly began checking all the overhead bins in F, and finding only meager space for my backpack and maddogging helmet, proceeded to investigate bins in the forward part of Economy Plus. I was determined, even though the gate agent was already in the process of writing out a gate-check tag and affixing it to my bag, and suddenly - yes, some elusive space! Again with some dissatisfaction, I admit to having forcefully and clumsily rearranged the contents of that overhead bin and then expertly shoving my over-sized Samsonite into the created space. And I then took 1D, without so much as an evil-eye to the occupant of *MY* 2D! :)

Fondly from flight, now 0:56 past wheels up, and above western Ohio, (though, obviously, my note will be dispatched only upon making contact with one of ORD's fine runways)

**

Awaiting a barrage of criticism from non-existent readership, pertaining to all the explicit and tacit haughtiness that, it might be imagined, oozed forth from me...

Post script: For the sake of posterity, here's what the blurry text in the Airbus advert above really says: Read Ad Astra It's the Best Read Ad Astra (et cetera). Ok, here's what it really says:

Congratulations to everyone at Continental and United on the merger creating the new United, a truly world-class global airline. Your partners at Airbus, the world's leading aircraft manufacturer, wish you all the best. October 1, 2010 was a big day for the world of aviation, and for everyone that wants to fly.

07/10: Big-picture musings

I will not commence this post with a renewed vows of frequent and substantive posting. I'll let the following (true) statistic speak of the volume of readers that have been begging, badgering, and downright being belligerent about the dearth of content: Google currently owes me less than the typical price of a cup o' Joe in advertising fees for the past few months. Hopefully that statement is sufficiently vague to dodge those highly-paid Silicon Valley lawyers, who are just itching to sue the latest dirt-poor blogger for untold damages at having revealed their precise remuneration from Google Adwords. Based on my earnings, I can't even afford the Metro fare to the courtroom, to say nothing of needing to hitchhike my way back.

Those pleasantries aside, I have navigated a transition into new professional endeavors over the past few weeks, and the upheaval having passed, I trust that there's at least somewhat of a chance for sustained value generation on these pages over the weeks ahead. And the impetus for the vagueness is an omnipotent, oddly mysterious, 'just because', its being one of the few perks (ok, the only one) of being Founder, Chairman and CEO of Ad Astra Publishing and Pontificating, NLC (like an LLC, but better, with no liability whatsoever!) And yes, dear reader, the way this writing is flowing, I too identify this post as being at risk of speedy revision.

In just-breaking news, markets have not stood still since I last scratched the virtual chalkboard that is this blog. September spawned a sustained and, so far, unbroken move towards the upside, with the broad-market /ES contract now looking over-extended, though not necessarily without potential for one last pop, before the inescapable tendency towards mean-reversion says hello. In any event, 1175 looms as important forthcoming horizontal resistance, as do 1200 and 1210 further up the chart.

A 180d/4h /ES chart follows. From here on, such notation will convey the following: first, the time period of the chart (here, 180 days); second, the time period of each bar (here, 4 hours). /ES is, of course, a 24/5 contract (meaning that it trades for approximately 120 hours per week); hence, a 180-day chart of /ES will contain far more data that, say, a 180-d depiction of SPY, its corresponding exchange-traded fund, which trades for but 32.5 hours per half-fortnight. And I trust, reader, that you'll somehow forgive the quality of this late hour's missive, and return for more dreary punishment tomorrow. Yes, I did say tomorrow.

08/07: Markets quieter, no longer fiercely trending

Markets put in a quieter session today, in comparison to the post- July 4th fireworks of this week's first two trading days. /ES futures, after closing yesterday at 1056, quite near the session high, today opened higher, declined modestly through the meat of the session (a peak to trough decline of 13.75 points, or about 1.3%, from 1067.75 to 1054), and rallied impressively into the close, settling at 3:00p just two ticks shy of the intra-day high. Sentiment was boosted with a bullish unemployment claims report released at 7:30a CST. Here's the day's chart:



As already mentioned, markets rallied into the close, which marks a stark departure from markets' habitual PM weakness of the last several weeks. Of course, late-day sell-offs are hallmarks of bearish markets, and afternoon buying, particularly into new highs (which /ES futures today proceeded to set shortly after the 3p CST closing bell), augers well for further gains over the near term. Further bolstering bulls was a decline in Treasuries; /ZN futures declined to below two-seek support of 122'05.

(Editorial aside: To follow-up yesterday's brief commentary regarding the spelling of the plural of Treasury, referring to the bond, today's Financial Times records the spelling of the instruments as 'Treasuries,' which aligns more with my intuitive sense of correctness than the WSJ's reliance on 'Treasurys.' Hence, going forward, I'll stick with the FT's example.)

The bears retain at least two important arguments in their arsenal, the past three sessions' price action notwithstanding. Most importantly, volume failed to climb into above-average territory; today's NASDAQ volume clocked in at 2.06 billion, below the 20SMA of 2.24B and firmly below the volume levels of three particularly active sessions of the recent past: 6/25, 6/29, and 7/1, each of which had volume in excess of 2.65B. (I don't include NYSE volume readings here, as I am finding conflicting values of the metric from various sources; also, I am concerned about the metric's continued reliability, as more trading shifts off the NYSE and onto alternate exchanges.)

Furthermore, /ES futures continue to remain in a 2.5-month, downward sloping price channel; the upper line of the price channel is presently at approximately 1100, which /ES futures would have to top in order to firmly enter more bullish territory. In the region of /ES = 1100 also lurks the all-important 200SMA. Caveat emptor.

07/07: A one-way day, markets shoot higher

Days like today are rather frustrating for traders with a predilection for contrarian strategies, of which I am one. Here's the whole story, in a single chart:



Relentlessly, indefatigably, most remarkably, markets climbed higher, higher and higher still, with /ES advancing 40. Only twice during that dizzying rally did the instrument stray more than 5 points from its hitherto-notched intra-day peak, once by 5.5 points and another time by 5.75 points. Thus, a trailing stop on a long ES position with a mere 6 points of "leash," entered at the pre-market nadir, would have captured the whole 40 point rally. Remarkable!

By the closing bell, the S&P-500 had advanced 32 points, or 3.1%; the DJIA bulked up by 275 points, or 2.8%; and the NASDAQ added 66 points, or 3.1%.

The rally may yet be all smoke-and-mirrors, however, which is why I've refrained from taking any long positions into the overnight hours. Today's rocket-ship was not fueled by above average volume (see below), there was no particular news that might have provided a durable impetus for buying, and other measures of risk aversion, e.g. Treasurys, as measured by /ZN futures, remain elevated. That said, there are certainly plenty of other risk metrics showing marked improvement over the past two sessions, including /CL (crude futures; up), EUR/USD (up, and rising since a nadir on 6/6), and even to some extent /HG (copper futures; somewhat firmer).

(As an aside, I've noticed that the WSJ refers to the plural of Treasury, when referring to the financial instrument, as Treasurys. Could it really be so? Until I hear otherwise, I'll be employing the convention, as I've done in the above paragraph.)

Here's how the day's volume stacks up, quite literally, against the past 180 days, first on the NYSE, second on the NASDAQ. Apologies for failing to slap on a 30EMA, or similar.


*


I am most curious what tomorrow's markets will bring! /ES = 1100? Or /ES = 1000?

July Fourth in the cradle of American liberty

Sunday, July 4th saw me take a characteristically lightning-paced swing through a distant city, flanked by mileage-earning flights purchased at favourable cost-per-mile ratios. In this case, the destination was Philadelphia, most fitting given the date.

My plans for travelling to Philadelphia hatched a few days earlier, on the preceding Monday. US Airways was offering a July 4th special on Twitter: $56 all-in for MKE-PHL-MKE (MKE being, of course, Milwaukee, WI), and other East Coast and Midwest cities were pricing similarly. Chicago was, however, excluded; indeed, MKE was the farthest airport from PHL included in the sale. Naturally, I was interested, and my mind was firmly settled once I saw the most favourable timings on offer: a departure at 6:00a, my absolute favourite time of day to fly, and a return in the late evening (at 7:55p), allowing for a full-day visit to the destination city.

The morning of July 4th had me waking to my iPhone's relatively pleasant "Doorbell" alarm at 3am sharp, and I was soon off after swift execution of the 'ole morning routine and consumption of a full three-course breakfast -- for those interested: Whole Food's honey and oats cereal, cottage cheese with pear-and-pear-juice-from-a-can (quite tasty actually!), and pumpkin seed bread with thinly-sliced smoked turkey and muenster cheese. I was engaging the dance music within my car's CD player by about 3:50a.

Sadly, the twin risk factors of an empty highway and a holiday-linked, augmented police presence meant that I was cruising quite close to the posted speed limits on the morning's 77-mile journey from the 60630 ZIP code to one of MKE's $5/day remote parking lots. In a departure from my usual keen sense of situational awareness -- if I may say so --, I missed the road construction- obscured exit for Mitchell airport, necessitating a detour of 2 or 3 miles. The few minutes' extra travel time, through leafy and deserted residential areas just north of the airfield, revealed an interesting similarity between the Germanic-heritage Milwaukee and the contemporary motherland -- traffic lights set for an efficient yellow- or red-blinking (depending on whether the street is a capillary or an artery) regime during the dead night-time hours!

I parked, was picked up by a waiting shuttle bus, and found myself entering the terminal (pre-security) at approximately 5:20a. The expeditious progress was most fortunate, as I received at ~5a a phone call and voicemail from one of my contacts: "US Airways Elite." The VM, along with a corresponding email, reported the news in a single voice: my flight to PHL was delayed until 7:00a. Thus, I scurried into the terminal and towards the departure board with great haste, knowing I had the perfect excuse to re-route via CLT (that's Charlotte, NC, another of US' hubs) if there was a timely flight. And indeed there was, at 5:40a.

My scurrying turned into a full-blown run. To the security screening checkpoint, discombobulation and "re-combobulation" with a flair and efficiency honed by too much experience and too little time, a final dash to the C18 -- naturally, the farthest gate from the security checkpoint. I arrive to a gate area deserted of passengers, but, thankfully, the jetbridge door remains open and two gate agents are milling about. I present my case. I learn that the PHL flight is delayed by a mechanical, which might last beyond 7am. (Indeed, the flight was eventually cancelled at approximately 10:00am.) I board the CLT-bound bird at 5:30a taking 8A, my preferred exit row seat. I have just enough room to read the Weekend FT, though turning the pages requires the practiced skill of a contortionist.

What fantastic luck, however! I absolutely adore the "maximized" airport experience, where I can achieve the most with the least amount of inefficiency. Surely, re-routing onto a more scenic (and more rewarding, vis-a-vis mileage accrual) pathway, savouring the emotional rush of successfully negotiating one's full demands with the airline counterparty, and executing the entire labyrinth of airport entrance to gate re-booking to aircraft seat in a mere ten minutes is deserving of underscore! Likewise, a time of 2:40 for all I'd hitherto accomplished that morning was worth noting with satisfaction.

The journey down under to CLT was most pleasant, though certainly nothing as sensual as might be implied to the particularly keen reader. Though other road warriors might (vehemently) disagree -- as though I were trying to inculcate Freud's thoughts on religion to a red state -living, large gun -toting, earmarked Bible -thumping man with a particularly large and red neck, with the veins practically bulging out -- I like the CRJ. I admit, the statement applies not if I should suffer the misfortune of daily or weekly commutes on the stubby bird, and indeed, the craft are particularly susceptible to that circle of hell known as interminable-delays-due-to-late-inbound-aircraft-that-are-not-communicated-in-advance-and-announced-in-15-minute-increments-and-average-hours. But for a 5:40a joy-thrust (not a mere joy-ride) into the blissful heavens, anything that flies will do. Yes, I might have low standards because I am deprived, relative to my natural desire of multiple weekly go's. Yes, I mean flights.

Arriving in CLT, I had enough senses about me, despite having just enjoyed an enthralling read of the pink pages and surprisingly pleasant service from the FA (An actual coffee refill! Without needing to ask!), to snap a picture of the curvy beauty:



The adventure, of course, continued. A "classic" Boeing 737-400 would be my chariot to Philadelphia, the layover was a tolerably short fifty minutes (only 25 once zone 1 boarding is taken into consideration), and I would be again riding exit row, this time with an empty adjacent middle. Life is good. And -- Eureka! (Sorry, I could not resist.) I made quite the earth-shattering discovery on this sector. Just see for yourselves:



The flight itself did not disappoint. Jetting from the Southeast, a product of the Coca-Cola company was in order, particularly as I was a shareholder at the time of the flight. To my surprise, the FA took quite extraordinary care with the serving of my Diet Coke, pouring in little bits at a time as the foaming subsided, such that I was left with a "perfect" (plastic) glass of copious black liquid and just a centimeter or so of vigorous foam, all the way up to the brim. Mmmm. My seat was in the Foxtrot column; thus, views of the Bay prevailed, rather than the more enticing District depictions.



We kissed the City of Love's 27L around 11:00a, just as my original MKE-PHL was about to post a cancellation. Thank goodness I navigated to and through MKE with such alacrity! And so, two SEPTA rides the wiser, I emerged in central Philadelphia, just before Independence Hall, where I was greeted with a parade literally at the subway steps (I was expecting nothing less) --



And what a glorious day it was! A parade to greet my arrival, the sunshine and cloudless sky matching conditions I might expect in Waikiki, an entire afternoon for refinement of my trading operation's Business Plan (it is ceaseless, eternally-ongoing labor, almost Sisyphean, though certainly not devoid of its peculiar pleasure) -- the day was mine for the seizing. And carpe diem it was. I shall not bore you with the gory details of underlining here, annotations there, glances interspersed at the idyllic location of shady park behind Independence Hall, boy choir singing at its foot, patient reader (and somewhat confused reader, too, for you are wasting your precious time with this blog's effusive dribble -- the content is lacking; the words are in wasteful abundance).

In due time, I decided that the twelve-hour interlude between proper meals was just too long. It was time for a cheese-steak, a culinary adventure I'd never previously enjoyed within Philadelphia's city limits; my iPhone was indicating "Jim's" to be a popular choice, and it certainly passed the litmus-test of having a plausibly working class, folksy appellation. I was off to its South Street location, a jazzy drag reminiscent of Washington's Adams Morgan or Chicago's Division Street. And while I did not opt for the cheeze-whiz (note its gooey application in the first pic below), my creation was still authentic (and oh so delicious!) --


*


Somewhat satiated -- I honestly could have eaten two more of the sandwiches, showing virtually no resistance to its salty and greasy components, qualities that are generally verboten in my day-to-day diet of whole grain bread, brown rice, and sparkling water -- I ventured into the city for a long-ish walk. The architecture was just begging for my iPhone's studied glances; I wish I had a capable SLR, for the beautiful vistas of the afternoon surely demanded a higher caliber of photography. Some highlights:


*

*


After a quick visit to Sts. Peter and Paul Cathedral, off of Logan Square, for about half of the late afternoon Mass, I was quickly finding myself approaching the twilight of my stay in Philadelphia. And yet, the sun, still somewhat temporally removed from its own decline, was still moderately high in the heavens, its waves of heat lapping, at once gently and urgently, against my skin. No matter the time of day, however, a jaunt to Philly without at least a token moment of laying in the grass of Rittenhouse Square just would not do. And boy, was it idyllic! A precious few minutes were even mined from my schedule for an obligatory visit to the Square-side Barnes and Noble, where I skimmed through the Georgetown Journal of International Affairs, finding an article by one of my former professors, Balbina Hwang. Ah, school pride! Here I am, resting in the grass, contemplating Thoreau:



At this point, only an expeditious dash to 30th Street station would do; the airport-bound, R1 SEPTA would not wait! The dash turned into a full-throated run somewhere on the Walnut Street bridge over the comically-named Schuykill River. Such is one of the hazards of being a time-maximizer.

In no time, I found myself back in my comfort zone -- exit row on the CRJ. The journey to Milwaukee's Mitchell Field was terribly expeditious, with wheels-up only 4 minutes after scheduled departure time, a feat virtually unheard-of @ PHL. (Lighter traffic of the July 4th holiday surely helped.) Bucolic scenes serenades past my window:


*


Thanks for travelling together with me!

06/07: A short-lived dead cat (?) bounce

Markets notched a most interesting session today. After tanking approximately 10 points in the final hour of trade on Friday, July 2, ahead of the July 4th market holiday, /ES futures proceeded to drill to fresh 2010 year lows on July 5th, as the U.S. holidayed. Yet, on touching most-powerful support just above 1000 (1002.75 was the overnight low), the futures market ignited on a powerful, sustained, and near-unbroken rally that lasted over 12 hours, taking /ES futures to 1025 by today's pre-market and upwards to 1038 by the mid-morning CST.

And that's where /ES ran into resistance from a robust price channel off the 180-day chart, recoiling in fear. Bears retook control, and markets came to only a few points of their intra-day low of last Friday (which was /ES = 1010.75). Here's the chart I referenced:



Of note is the performance today of the Treasuries market. In the face of rising equities during the pre-market and early market hours, Treasuries firmly held onto their recent gains. Generally, Treasuries and equities (or, more generally, risk assets) are negatively correlated; as investors' outlook improves, they buy risk assets and sell safe-haven assets, of which 10-year Treasuries are the 500-lb gorilla. And, to be clear, Treasuries can be viewed in terms of price or yield. The above statements refer to the price of Treasuries; but if speaking in terms of yield, which moves inversely to price, then Treasury bond yields and equities are positively correlated.

Two windows onto the 10-year Treasury market follow, both charts of /ZN, which are 10-Year U.S. Treasury Note Futures. First, a 90-day chart with 2-hour bars, which is at the high of its range. Second, a 9-year chart with weekly bars, showing a wide-angle perspective onto the market; note how Treasuries spiked during the worst throes of the financial crisis.


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Finally, /GC, the Gold Futures contract, has been exhibiting notable price action as of late. The 3.5-month chart -- the longest intra-day period available to my current technology -- shows marked deterioration, with one important and robust price channel pierced, and another in danger of violation. Gold should see support at the $1180 level, at least during the intra-day period, but a break downward is certainly a possibility. I'm considering a short of the GLD if /GC prices at $1170 or below. Here's the chart:



Happy trading!