Look up, “tired bull,” in your trader’s almanac and you will find this picture of the Dow Jones Industrial Average:

Virtually every indicator on the chart is diverging with the current new highs in price signaling that momentum is dramatically waning.

The VIX, which I have discussed here ad nauseum, also continues to diverge strongly from the index. In stark contrast to the market’s new highs, it stands a solid 25-35% above its recent lows and consistently finds support at the key 12.5 level refusing to break down.

On a longer time-frame, Jason Goepfert of SentimenTrader reports tonight that the current reading in the weekly MACD for the Dow is just about as high as it gets. In the past, once the indicator has crossed down from this point, it has lead to an average decline of roughly 5%.

Lastly, the weekly chart of the Dow has registered a DeMark Sequential 9-13-9 sell signal which suggests the odds favor a reversal rather than a continuation of the current trend.

Will the Street of Dreams become the Boulevard of Broken Hearts? I wouldn’t bet against it.

The writing’s on the Wall.
LIV

Look up, “tired bull,” in your trader’s almanac and you will find this picture of the Dow Jones Industrial Average:

Virtually every indicator on the chart is diverging with the current new highs in price signaling that momentum is dramatically waning.

The VIX, which I have discussed here ad nauseum, also continues to diverge strongly from the index. In stark contrast to the market’s new highs, it stands a solid 25-35% above its recent lows and consistently finds support at the key 12.5 level refusing to break down.

On a longer time-frame, Jason Goepfert of SentimenTrader reports tonight that the current reading in the weekly MACD for the Dow is just about as high as it gets. In the past, once the indicator has crossed down from this point, it has lead to an average decline of roughly 5%.

Lastly, the weekly chart of the Dow has registered a DeMark Sequential 9-13-9 sell signal which suggests the odds favor a reversal rather than a continuation of the current trend.

Will the Street of Dreams become the Boulevard of Broken Hearts? I wouldn’t bet against it.

The writing’s on the Wall.
LIV

My prayers have been answered.
LIV

My prayers have been answered.
LIV

Back in March I reviewed Cascade Bancorp’s annual report in a piece titled, “Credit Quality Cascading at Bend’s CACB.” After reviewing the company’s recently-released quarterly report it’s safe to safe to say that the cascading loan portfolio is dramatically worsening.

From September 30 to December 31, 2006, non-performing assets (delinquent loans) grew from $1.8 million to $3.0 million. In the latest quarter ending March 31, 2007, NPA ballooned again to $7.7 million. This is an annualized growth rate percentage in the thousands.

Bottom line: The fastest growth the company now reports, parabolic growth in fact, is in the deterioration of its core business.

Ironically, however, it looks as if the stock has already priced the bad news in for now and is primed for at least a bounce:

With a short ratio of nearly 36 days, I’d actually be surprised if we don’t soon see a short squeeze. (The short ratio is the number of days it would take for short-sellers to cover if they accounted for all the volume traded every day. A short ratio of a week is usually troublesome to short-sellers. A short ratio over a month, as is the case for CACB, is nearly unheard of.)

Ah, the vagaries of volatility; the ironies of investing.
LIV

Back in March I reviewed Cascade Bancorp’s annual report in a piece titled, “Credit Quality Cascading at Bend’s CACB.” After reviewing the company’s recently-released quarterly report it’s safe to safe to say that the cascading loan portfolio is dramatically worsening.

From September 30 to December 31, 2006, non-performing assets (delinquent loans) grew from $1.8 million to $3.0 million. In the latest quarter ending March 31, 2007, NPA ballooned again to $7.7 million. This is an annualized growth rate percentage in the thousands.

Bottom line: The fastest growth the company now reports, parabolic growth in fact, is in the deterioration of its core business.

Ironically, however, it looks as if the stock has already priced the bad news in for now and is primed for at least a bounce:

With a short ratio of nearly 36 days, I’d actually be surprised if we don’t soon see a short squeeze. (The short ratio is the number of days it would take for short-sellers to cover if they accounted for all the volume traded every day. A short ratio of a week is usually troublesome to short-sellers. A short ratio over a month, as is the case for CACB, is nearly unheard of.)

Ah, the vagaries of volatility; the ironies of investing.
LIV

I watched “Casino Royale” last night for the first time since seeing it in the theater. Great movie. Truly a successful turnaround for the Bond franchise.

But in watching the film a second time I was struck by the fact that the villian is introduced in the movie as a short-seller; it is a key aspect of his character and central to the plot of the film. Only an evil short-seller, with an eye that weeps blood, would dare cross the famous 007!!!

True, many short-sellers in today’s stock market must be weeping blood. I find it interesting, however, that an investment technique as arcane as short-selling would feature in a film series known for encapsulating pop culture (the film also taps into the waning poker craze) and that it would so easily be associated with crime and corruption.

I woke up this morning to this headline in the Wall Street Journal: “Boy, It’s Tough Being a ‘Short.’” I guess newspapers do make most of their money simply stating the obvious. Pouring salt in the wound is only incidental.

An old Wall Street adage says, “nobody rings a bell at the top,” but the contrarian in me would beg to differ. Right now he’s banging the hell out of it.
LIV

I watched “Casino Royale” last night for the first time since seeing it in the theater. Great movie. Truly a successful turnaround for the Bond franchise.

But in watching the film a second time I was struck by the fact that the villian is introduced in the movie as a short-seller; it is a key aspect of his character and central to the plot of the film. Only an evil short-seller, with an eye that weeps blood, would dare cross the famous 007!!!

True, many short-sellers in today’s stock market must be weeping blood. I find it interesting, however, that an investment technique as arcane as short-selling would feature in a film series known for encapsulating pop culture (the film also taps into the waning poker craze) and that it would so easily be associated with crime and corruption.

I woke up this morning to this headline in the Wall Street Journal: “Boy, It’s Tough Being a ‘Short.’” I guess newspapers do make most of their money simply stating the obvious. Pouring salt in the wound is only incidental.

An old Wall Street adage says, “nobody rings a bell at the top,” but the contrarian in me would beg to differ. Right now he’s banging the hell out of it.
LIV

A Portrait of the Martial Artist as a Young Man:

LIV

A Portrait of the Martial Artist as a Young Man:

LIV