Financial Sector ETF's-Watching for increase

Every quarter institutional managers are required to report their long positions in the U.S. Market. We can see strong hedge fund increases recently their positions, and the market should begin taking note.

I'm still concerned about a commercial real estate wipe out, but believe the banks have done well raping everyone and starting over, and removing toxic assets, meaning making us pay.

We're keeping track of the financial sector.

God

They say that business bloggers are supposed to personalize their "work blogs" at times.

Okay, I'll do that, as I have no shortage of thoughts or opinions:-)

I believe that God is us, in each of us, and who we are, and becoming. As we “die”, or leave our bodies, my belief in heaven and hell, and their existence is based on how we “see and feel” as we pass.

There are just a few questions that pass before us as we move on. These same questions are actually before each of us each day:

*Who have and am I loving?

*How am I contributing and helping others, showing love?

*Who loves me? Why?

How we think out these questions, as we pass, is our own heaven or hell, based on our answers.

How we live these questions, and their answers, as we live, is how our despair, hope, unhappiness, or joy is in our lives.

It is this simple.

This is life. Not death. We only know what we know. We do not know what we don’t know.

For example, for years it was a “fact” that there were only white swans, until scientists discovered a black swan in Australia. For years we KNEW what we knew, not knowing what we did not know.

This is true in how each of us live, love, and contribute. We understand of others only what we know of ourselves, and in knowing others we are to learn of other perspectives, insights, and struggles.

We are what we decide. This is true all through our lives.

SRS Puts-The thinking behind the trade

The VIX is at its lowest level since last September, and Bollinger Bands ( a measure of volatility for VIX) are also as narrow as they were before last September. We all know that VIX rallies as people grow more fearful, and declines as greed sets in and complacency is in "action". What this means now: traders are less fearful of an overall stock decline.

True chartists know that as Bollingers tighten it is typically in advance of a large scale move, one way or the other. It could easily be higher.

As a contrarian, cynic, provocateur, and general questioner of facts I see simply that we hit lows in March, and are having a bear market rally from these extremely oversold conditions.

Back in March the money was being made "shorting" and it's all the talking heads could even say, and now the money is being made by "jumping onto the wagon" and not missing out on the rally that will never stop.

As I write this on 8/11 the market has dropped 81 points. Typically by the end of the FOMC meeting, today at 2.15 p.m., the market will have rallied again on "no increase in interest rates" and that the FEDS did not tell us the world was ending. We'll see.

SRS, which you'll read about above, is off for us by 38%, and has a long way to reverse. But it can.

Buying at Market Highs, Or What are we Missing Out ON?

Many are kicking themselves that they have not been the buyer of stocks during this last amazing run up to 9350 on the Dow August 7^th, 2009.

For traders that bought up inventory in our Shifty Fifty, the 1/3 that we had not sold before the October fall, it’s been great returns. Our moves to sell 1/3 at 14,100, and 1/3 at 11, 100 and begin buying again at 7400 and lower, the same stocks in our Shifty Fifty, thusly dollar cost averaging great returns on the way up. And Gold has done us well.

Recent call profits have done us well.

For traders that have bought in the last few months or weeks, it looks good, and smart traders should begin taking profits at 20%, but I remain skeptical that it looks good for long term holdings. Following a Fib retracement from the 6400 bottom, the market should first top out at 10,400 to 10,600.

Most technicians, even Bernanke, anticipated that would take a year, with the serious ongoing problems. Krugman and Roubini, who I follow, believe the original stimulus package (not the Bush fraud one where the money went away) would work, but anticipated 1.23 trillion to turn this around, something even charismatic Obama knew he couldn’t pass Congress.

The question really is: will we need more money? Are things really that much better?

The best time to buy a stock is when FEAR leads the market and people are willing to sell at any price.

So, we have some good profits in our core, speculative, and “real $" portfolios, available in the password area at www.bluechipoptions.com .

Now is not the time to buy stocks. It may be the time to buy some stocks. And to do so with tight stop losses. Let's be patient.

VIX is simply a good indicator to tell us how much people are willing to pay for put insurance on stocks. The premiums go up. And that’s the time traders should buy stocks. Watch the volatility of VIX not to lead your decision; right now market sentiment is so obvious that even a cab driver is predicting a fall.

And the other man in the cab with me, sharing a ride, said quite the contrary..."11,000 by Christmas."

Take Prudent Risk

So, we have a bull market. Let’s take it with caution. Hope for some healthy consolidation and a bit of flat lining. That would stabilize the move that has just taken place in the market.

Zappos.Com vs. What we Know

Much of what our world is dealing with is a change in how life is. Here's an example. As a guy, I buy three types of shoes: dress shoes (special ordered from Johnston Murphy) and Birkenstocks (made in Germany since 1744), and New Balance running shoes. That's all I own.

I know what shoes I like, and I have them resoled by the factories, part of why I buy a quality shoe.

For years I would go retail stores to buy, until I found Zappos. Zappos was just bought by Amazon, which is a stock we own at www.bluechipoptions.com

When I order from Zappos they pay the freight, there and back. It gets here the next day. Returning something is easy.

Why would I go to a retailer? The price is lower (same shoe, less distribution cost), the shoes come the next day, and I don't have to go to the store. In fact, the store has less choices of shoes.

Of interest, Zappos has most every shoe in the world, but not Johnston and Murphy. This company chose, 100 years ago, to be a "factory direct" product, with their products only sold at their stores, and/or through their catalog or website. They've struggled with the model in recent times.

My point is simple. The entire way we do business in this country, and in the world, is changing.

The models we as consumers know are changing, and the models of HOW we consume are.

Money has become a world currency, whether one or not, of STUFF.

Prices are known, ending an age old tradition of published prices that assured margins, and a business society in which doing a profit and loss by job, a key to manufacturing, can almost assure most manufacturers they are going broke, as they now make their net net earnings from rebates earned from manufacturers for selling their goods, and more products are sold at cost.

The vehicles that drive these changes will make money long term. This is what we must learn.

When Amazon reinvents how books are read with the Kindle, a major change and shift in society takes place, but it does not mean Amazon could be with winner in the game, but perhaps only the "change maker".

All I know is that I am astounded by Zappos. I am truly a satisfied customer, and wouldn't enter a retail store for shoes again.

Following the Trends

Play The Main Trend

The main trend of a stock is when the stock is above the bullish support line, and the Relative Strength chart is both bullish for the stock, and for the sector.

And the main trend is down when the stock is below its bearish resistance line on a Point and Figure chart and the Relative Strength chart is bearish for the stock, and the sector.

The Concept of the Four Legged Stool

It has been proven that the human mind can only truly handle 5 large projects or situations at a time. Multi-tasking may “sound good”, but does not really happen. We end up doing some things without completing them, while doing other jobs without complete thinking. As speed takes over our universe, and we have “instantaneous communication" it’s our natural tendency to begin to “overload”, or to hit our threshold.

To develop a business, a plan, or a project, it is always best to organize the effort. Most companies fail here because they have so many people multi tasking that it is impossible to sit down, prioritize, and then execute.

We fail at the execution.

To organize that effort I work as a consultant teaching organizations to focus on no more than 5 core objectives at one time. Each objective has a “seat”, or a core issue, shown in the 4- legged stool pictured below. This “seat” is defined as the WHAT (what must be done, what the issue is, what opportunity is being considered) and 4 legs hold up that seat, or the core issue.

One by one, we replace, bolster or rebuild four legs of a stool. We assign people to the tasks associated with the issues for each seat of the stool. You can build the four legs at one time, just not too fast on any one leg, and with projects that work in harmony. Or, some smart organizations may do the “research leg” before they even consider building a 4 legged stool.

Think of it as having rungs up a ladder, or multiple chair rails to build from the bottom of each stool leg to get to the top. You may not have to work on four legs at the same time, but the goal is strong support (the legs) for the concept (the seat).

This is a simple drawing that simply says:

-Identify (the seat)

-Define the issues and the how to’s (the legs)

It’s thinking this simply that can allow the complexity of a project to be completed perfectly.