Sunday, September 30, 2007

Guru View

The market Guru has been checking the Smart Money flow for us:

** Crude Oil
Oil is setting new highs, after testing a support-level at
78-79. The trend continues to point up; but what I find
especially bullish about oil is its COT chart. Notice how
commercial selling has been marginal as crude rallied
from mid-August up to today. So from a COT perspective
this market continues to look very bullish. And trend looks
bullish as long as we remain above the 78-79 level.

** Stock market
There has been a huge decline of open interest in all of the
major stock-indexes. As a result there has been some big
developments in the COT charts. For the S&P 500, net-
commercial position has seen a huge increase to being just
shy of 70,000 contracts net-long. If net-commercial position
remains at this record-level, I can only conclude that this
is very bullish. Trend also remains bullish as we continue to
consolidate on the SPX and hold above 1500-support.
The Dow Jones COT chart is starting to perk up, but
is overall little changed. On the price-chart the Dow
is consolidating not too far from its record 14,000-level.
The Nasdaq 100 COT chart is like the inverse of the
S&P 500 chart. There has been a huge breakdown in
commercial net-position. If you look at the Nasdaq three
year chart, you can see that these break-downs in net-
position are typical for this index. And when they occur
you typically see the NDX correct or at least consolidate.
From the price-chart, the Nasdaq 100 index broke-out,
above its 2007 highs last week, leading the other indexes
in relative strength. So the COT chart is starting to look
bearish, but trend remains very bullish. In this scenario
we must be weary of the COT development while
respecting Nasdaq's uptrend. As long as we continue
to trade above support at around 2050, the path of least
resistance for the NDX remains UP.
The Russell 2000 has also seen a decline in its net-
commercial position. The RUT continues to be one of
my key indicators on the market. While we are holding
about critical support at 800, the market should be fine.
A bullish confirmation would come if we close above 820.
In conclusion, the message from the COT charts
warrants caution, while the TREND for the indexes
remains UP.

** VIX
The COT chart for the volatility index continues to decline:
forecasting a continuation in the current down-trend. A
continued decline in the VIX would be supportive of a rally
in the stock-market.

** Gold
Gold's price chart is similar to oil's. Both are breaking out
to record-levels. However, their COT charts are very much
different. While in crude, commercials have shown very
little willingness to sell, for gold on the other hand, net-
commercial position dropped to levels not seen since
2005. So the COT chart is bearish and the price chart
is bullish. In this scenario we respect the uptrend 100%
but look out for any breakdowns. Currently gold looks
like it is resuming its bullish uptrend after breaking out of a
bull-flag pattern. I would be cautious if gold closed below
746, and become short-term bearish if we broke below the
bull-flag's support line at 730.

** US Dollar
The USD continues to sell-off. The trend remains down so
this development is to some extent 'expected'. What I find
even more bearish is the fact that net-commercial position
did not rise to a new high. Maybe it will next week, or maybe
it won't. For the time being, commercials are not viewing the
current levels on the US dollar as 'bargain' prices. Overall, the
USD continues to paint a bearish picture.

Oh! I forgot to mention that there was (still is) a hole on the VIX index. For long term Swimmer followers, you know what I mean, the hole will be filled. The hole was caused by market rebounce and a sudden drop of fear!

But Swimmer believe there might be some selling off next week. Have you notice that last week was the end of quarter, a lot of hedge fund managers have a tendency to buy stocks and make market go higher in order to get their "fat" bonus. Hedge funds not only charge for managing fee, but also receive "performance" incentives, sometimes as high as 20%. But in order to get the latter, they have to reach certain "water mark". This is the reason for "window dressing".

Do you need any short candidates? Let me do a poll:

What kind of recommendations you want for this week?

Long
Short
Predeep
Contrarian
Warren Buffett
China


(View Results)

Create a Poll





















Friday, September 28, 2007

China Syndrome 3

A wave of sub-prime mortgage crisis hit the financial market hard last month. The rising interest rates and looming recession reduced demand for new homes even worse than Wall Street analysts expected in August, recent government data indicated.

According to Bloomberg, the decline in housing market could cause 1.5 million families to lose their home this year. It also may lead to 100,000 people working in the housing industry to lose their jobs and many mortgage companies to close their doors. The list goes on and on ……

However, after hitting the bottom on August 16th and a surprise Fed rate cut announcement earlier this month, the stock market roars up and both Dow and NASDAQ indexes are getting close to the all time high again. So many of you would like to ask why? Many of the talking heads in the media can cite a number of reasons, but the smartest investing gurus would tell you that it’s because we are benefiting from a strong Global Economy.

US economy is probably slowing down but there is no sign of recession, but the world economy is at its best shape than ever. The US may be the locomotive of the world economy before, but in the new century the fastest growing BRIC countries (I don’t know who coined this term – please check with the dictionary on the left – it refers to the world largest developing countries: Brazil, Russia, India and China) are the economic hot zone in the new global economy environment. In the hot zone, the economy is growing fast, people in those regions are catching up with the way of our living in the US. Especially in China, the “de facto” manufacturer of the world, with the world largest population of 1.4 billion, its economy is growing at about 10% rate for the last 10 to 15 years. With the current pace, it will replace the US, emerging as the biggest economy on earth in the next 25 years.

China will host the Olympic Games in 2008, a lot of construction going on. Chinese stock market, ironically had 10 years of bear market from 1995 to 2005. However, after bottomed out in early 2006, it doubled, quadrupled in 2006 and 2007. Real estate value soared in Shanghai and Beijing. Many people believed that Chinese stock market was over ran, that’s why it crashed in late Feb. to early March. But that’s when Shanghai SSE Composite index was 3,000, now it’s in 5,500. So you do the math. But that’s for A-shares, A-shares are not tradable to foreigners for various reasons. In order to catch the moving train, the only way for you and me to invest in China is to buy the Chinese stocks listed in NYSE and NASD, which they call the N-shares. Like I said, although the Chinese index moved from – oh I have to check – maybe from 1,000 low in Dec. 2005 (see earlier posts China Syndrome published on September 13, 2007, where I plotted out SSE Composite index, the symbol is 000001.SS) to 5,500 now, but the N-shares have not moved that much. A few well known ones, like LFC, BIDU, moved a lot, but the big oil companies like PTR did not until I recommended.

Overall, the Chinese stocks are on fire. I don’t know how long they will last, but for now, buy-on-dip seems to be the right thing to do.

Recent Performance

Enjoy,

Swimmer





















Thursday, September 27, 2007

Market Overview and China Picks

Several visitors asked new picks, here are a few more:

ACTS - a technology company with PE of 8.4. Even yesterday went up, the up-trend probably will continue.

CHINA - What else can be more appropriate to buy a Chinese stock with a symbol of CHINA?

As you can see that from technical standpoint the stock market has broken out to the up side generating a buy signal. Once that happens the bears who shorted the market knew that they were wrong, now they have to deal with their mistakes. And their wrong short positions "burn" their portfolio, each day goes on they loss more money. Therefore, this is a very profitable period of time for longs. Any dip should be bought.

Smart money followers predicted this turn-around long before anybody else. So buckle up and enjoy the ride!

Mkt Swimmer

Wednesday, September 26, 2007

Technical Master

Source: Decision Point
Date: 9/21/2007
Title: NEW BUY SIGNAL
by Carl Swenlin

Ever since the market hit its correction lows in August I have written three articles, each emphasizing that the odds favored a retest of those lows (see Chart Spotlight on our website). As it turns out, we haven't had any decline that I would classify as a retest, and the market has broken out of a triangle formation on high volume. When the breakout happened, it eliminated any reasonable possibility of a retest, in my opinion. Sometimes the low odds take it.

One thing I have been cautioning about is to not get too bearish, because many of our key indicators had remained bullish. Another thing I should mention is that we should never get too invested in a forecast. I have watched as many of my bearish colleagues, after being proven wrong by the market, are still tying to justify their being bearish rather than trying to get aligned with the market. The market will eventually prove them right because, because, because . . . Maybe they will be right sooner than we think, but for now the market looks as if it will be moving higher for a while.

My bullish stance is due to our S&P 500 timing model having switched from neutral to a buy on September 13, three trading days prior to the Fed-induced market breakout. Also, prior to the breakout, about half of the market and sector indexes that we track with our primary timing model were also on buy signals. On the day of the breakout, the other half switched to buy signals.

The chart below shows the two components needed to generate a buy signal -- the Percent Buy Index (PBI) crossed above its 32-EMA, AND the PMO (Price Momentum Oscillator) was above its 10-EMA. Note that the PBI is only at 59%, but it is trending up, which is most important.



Bottom Line: The long-awaited retest did not materialize, and. in my opinion, the market has begun another leg upward that should challenge and exceed all-time highs for the S&P 500 Index.

Instant Report

CNTF - a Chinese stock - is perking up.

Swimmer

Market Overview and Picks

Swimmer's secret smart money indicators sliped a little even though the pre-market looks good. It's not necessarily a down day, but a good time to be cautious. On the technical side:

The Russell-2000 index gapped down on Tuesday and may have failed last week’s breakout. It’s sitting right in the middle of no man’s land after the close, between obvious support and resistance levels.

CPSL, one of Swimmer's recommendation, went up 200% in last 4 sessions from $3.5 to $10.45. Just last session alone it jumped 32%. While in long term it will keeping going up. But in short term, it's overbought.

I am scared, so for new commers, don't buy it now, waiting for a better entry point. I will work hard to find stocks like this so you have plenty of supply.

Similarly, I exercise caution for PTR and ZVUE.

DSCO is a small Biotechnology company, I noticed the insider activity a long time ago. Perhaps I should mention it earlier, I was lazy, but it has some interesting features I would like to discuss a little more later.

Happy trading,

Swimmer

Crystal Ball Report

Swimmer's crystal ball has made a lot of money for our visitors lately:

CPSL: 207%
ZVUE: 75%

For more winners, look at the left side, under "Popular Stories", click the first item - "Recent Performance". The spreadsheet is updated daily (I will try my best, forgive me if I forget, leave message though).

By the way, the "Recent Performance" replaced "China Syndrome" as the #1 - most frequently viewed story - traffic meter tells me.

Thank you and welcome,

Swimmer

Tuesday, September 25, 2007

PTR Conundrum

If you come to look for Recent Performance of my Picks, please click here or on the left side look for "Recent Performance".

Recent Performance

Let me tell you a joke, I forgot how to spell "conundrum", I went to Yahoo, typed Greenspan and the letter "co", the Conundrum jumped out. Nice trick, isn't it?

I don't think Greenspan invented this word, but he definitely popularized this word among other interesting phrases he "coined". Nowadays in Harvard economic classes they have to use at least 3 times a day.

Well, swimmer has a serious conundrum these days. For instance, Swimmer bought into PTR on September 10th, the day I recommended. I thought it's a good thing, because if I recommend I better buy it myself, just to show the vote of confidence. Disclosure, Swimmer does not buy every one of them on the recommendation list, otherwise he could be really rich by now. Anyway, one of the rules Swimmer coined over the years is that if a stock gains 10%, you should cut the position in half. Sounds reasonable, right. But Swimmer bought it in option, PTRLL - $160 call expiration Dec at $6. Now the underline security, which is PTR slowly went up from $142 to $160, Swimmer ignored the rule. Part of the reasons is for option, you are gambling, you spend the money in this case it's $6 per contract (well you have to pay $600 because one contract accounts 100 shares) and you mentally plan to loss this amount completely if the stock does not reach the strike price, at this time is $160. So you don't want to be too greedy, which means you just pick up a few contracts to gamble (the other way to explain is you don't want to put your whole portfolio into it, but if you do if you gamble is wrong, your portfolio will be "zero"). Now, I only had a few contracts, just reached strike price of $160 (just in the money), I am not going to sell it. Now the "trouble" started yesterday!

In the morning, I turned on the CNBC, I saw a few stocks I recommended appeared in green on the bottom of the screen. If you are a frequent trader you should be very happen that means a lot buying interests in pre-market. I almost fell of my chair when I saw PTR jumped $15, then I muttered the words "what I gonna do?, what gonna do?......"

You see, the jump up is okay, but my target price is $200. I was thinking, who is buying this right now, what's wrong with you guys, where were you just a few days ago? Warren Buffett sold PTR three times recently, and he failed to put a damp on your optimism?

As you can see on the chart, PTR gaped up three times in a row. My statistical model says, every gap up should be sold. If I did, I would loss money, a lot of money! If you are a frequent visitor of my blog, you would know I sold short on PTR before Warren Buffett did and made some money. Then stock went as low as $126, I became bullish on PTR and recommended it when it was $142. Now after a few weeks, it went to $160s, that's 20% gain. On temporary basis it's over-bought. But yesterday's action represents another 10% gain in a single day. But on the option side, I bought it for $6, now it became $28, that is 350% gain. Now do I want to sell the call contracts?

I still don't know how the market evaluates the stock, before Buffett sold, it was worth $160. After Buffett sold, it was worth - oh, about $125. But if Buffett sell a little more, suddenly it is worth $180. Of course you can cite a few reasons like the Fed cuts rates, oil goes up $80 a barrel, etc. But you can not say PTR fundamentals have changed, nothing has changed. I googled and found the following article, it's interesting to read:

http://stocktube.blogspot.com/2007/09/petrochina-is-charging-not-even-buffett.html

To sum up, Swimmer put big bets on Fed cutting rates and on China stocks. Both of them worked pretty well. If you want more of my picks and interesting commentary, please come back often. I need to update the performance table. New picks will follow.

Market is a little overbought here, but my short term Smart Money indicators are still positive in the short term. If there is any change, I will let you know.

Any suggestions on what I should do with my contracts? Please leave your comments.

Happy trading,

Swimmer

Sunday, September 23, 2007

Guru View 3

If you come to look for Recent Performance of my Picks, please click here:

Recent Performance

Otherwise, this is the Guru View Part III:
On 9/20 Commercial Net Positions (from one week ago to Friday):

DJ Index Composite: -1,950 to -1,182
NASDAQ 100: 25,684 to 25,426
Russell 2000 9,224 to 8,749
S&P500 – Day session: 6,801 to 787

** After the FED cut rates by 50-basis points, all of the major indexes rallied & closed above their key levels of resistance, which are now support.

The COT charts of the major indexes remain unchanged for the most part, excluding that of the S&P 500. There is some evidence of commercial selling over the last two weeks. If net-commercial position continues to decline at its current pace the SPX COT chart will start to look bearish.

** The VIX continues to break down in price, right after net- commercial position plummeted from over 12 000 contracts to their current level at around 1 000. Currently, the VIX looks overextended to the downside, so I would expect a bearish-correction (small-rally) or some further consolidation at the current levels: around 19-20.

** While the price-chart for GOLD is similar to the of oil's, their respective COT charts are totally opposite. As gold and oil both put in impressive rallies, net-commercial position for gold declined rapidly, while for oil - on a relative basis - it barely decreased. So for Gold, the price chart remains bullish - the TREND is clearly up with support at 700 & 730 - while the COT setup is bearish. Does this mean gold will correct next week? Not necessarily, but what it does tell me is that with the current COT setup this market vulnerable to a breakdown / correction.

** Crude oil continues to soar as it sets multi-decade highs: now priced right around $82/barrel. One might argue that we are overbought and a correction is imminent...and that may be true to some extent, however the trend remains clearly up, especially as long as we HOLD above previous levels of resistance, now support at 78-79. Moreover, notice how on the COT chart, there is very LIMITED commercial selling. Look at how bearish commercials were when oil was in the mid to high 70s. And now commercials are LESS bearish on the market when oil is trading above 80? This looks very bullish.

Saturday, September 22, 2007

Recent Performance

To celebrate the achievement of our one month old digital city blog "Market Swimmer", I am proud to announce that our growth is tremendous and performance is outstanding. Thank you very much for visiting my blog and leaving messages, and you have to realize that you, every one of you, made this possible. Without you the digital city is just another ghost town and I couldn't have had the energy to check all the information sources and formulated the winning strategies to beat the market. I hope the information from this web have contributed to your trading success during this turbulent time.

Remember, the whole purpose of this blog is to unite all the individual investing friends, to stop the "big guys" from taking advantage of us, watch the money flow and beat the market. When I looked back for the period of September 10th to date, the average performance of all the picks I posted is 18.5%. The outstanding performance is coming from two area, Insider pick and China:



Among them, the biggest winner is ZVUE, a technology company, when I made the pick it was $1.6, and it closed $2.6 on Friday with a whopping 70% gain. While I updated the spreadsheet, but the blog main page may not reflect that, so feel free to click on the page.

As most of you know, I am a professional and watching the smart money is my hobby, if you like what I do, please pass the news around. If we gather a reasonable crowd, everybody will make money. I will disclose my strategies later, maybe scattered within my blog, so please keep coming back and browse around. May the tremendous profit made be yours!

A lot of pressure though, I need to check on the government website, find out the commercial movement, prepare the Guru View, talk to you later.

Swimmer

Friday, September 21, 2007

Crystal Ball Report Number 2

Don't forget SCR!

SCR - SCR - SCR .....


Swimmer

Insider 1st, Swimmer 2nd, The 3rd - the rest of world

Insider - the first:

http://marketswimmer.blogspot.com/2007/09/pick-of-day.html

Swimmer - the second

http://marketswimmer.blogspot.com/2007/09/pick-of-day.html


The third, the rest of world:

(9/21/07 - 9:54AM HandHeld Entertainment trades up 36% following press release related to this week's)
9:54AM HandHeld Entertainment trades up 36% following press release related to this week's comScore data (ZVUE) 2.37 +0.64 : Before the open, ZVUE announced it had been named the fastest growing Web property by comScore Media Metrix for August 2007. In a news release issued Sept. 18, comScore reported that HandHeld had the largest increase in unique visitors (U.S.) by 327% month-over-month from July 2007 to August 2007. For the first time, comScore is now measuring all of HandHeld's Web sites as a single entity, a move that coincides with HandHeld's formal launch of ZVUE Networks, its online video advertising network.

Then, the rest of story!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Quick Overview

Quick Overview

  • Canada's wholesale sales up 2.0% from June.
  • Retail sales in the U.K. rose 0.6%.
  • China plans to restrict fuel made from agricultural products and cut import tariffs to reduce food inflation. Corn demand is expected up 14.5% by 2010, while output is expected to rise 3.5%.
    China's overall inflation rate in August was a 10-year high of 6.5%. China's food-price inflation however was 18.2%, 34.6% for vegetable oils and 495 percent for meat.
  • YoY, on September 19, cocoa stocks in New York Board of Trade warehouses fell 14% to 3.77 million bags. There are also concerns about the presence of black pod disease in the Ivory Coast.
  • Credit Suisse, raised its 12-month forecast for gold, silver and other precious metals because of supply shortfalls and a decline in the value of the dollar.

Buy:

CPSL

NTCT

Thursday, September 20, 2007

Corn and Nickel

Some perma bears are very unhappy about Bernanke:

Gartmans_ben

Yesterday, I said that the Fed had become Wall Street's "Bitch". It was toward the end of the post, and I assumed it would hardly get noticied. However, I guess it was pithy enough to have gotten picked up by a few media outlets. Today, I wanted to steer the discussion the other way: Ben seems like a smart guy who does not want to be Wall Street's play thing. He doesn't strike me as irresponsible, and he sure doesn't want to go by the nickname "Helicopter Ben." So let's consider the other side of the coin: What did the Fed Chair and the FOMC see that spooked them into a half point reaction?



Happy or not, unfortunately they have to cover their short positions.

Introducing Corn Products International Inc:

CPO (Bee Pick Buy)

Ni price took a hit before, it will recover. Look for a strong SYNL:



Have a nice day,

Swimmer

Wednesday, September 19, 2007

Guru View and Pick

Harvard professors believe that market goes like a random walk. But if it's a random walk, how come a few rich Wall street operators are getting richer and richer? Do you know how much Goldman Sachs CEO bonus was?

Not so said the Smart Money watchers, watch the big guys, there are plenty of money to be made.

Look for small cap stocks to take over market leadership as the major indices continue their recovery efforts and re-approach the summer highs.

Today's Swimmer Contarian pick:

DRYS

Leave comments if want the reasons behind.

Enjoy,

Mkt Swimmer

Tuesday, September 18, 2007

Pick of the day

ZVUE a Lot of Insider Buying

Monday, September 17, 2007

Pradeep

CDIC

Crying Wolf

Greenspan was asked how the market psychology at this time is different than the year of 1999 when the dotcome bubble bursted, he said "human behavior of fear is very predictable".

Well, did Al tell you if the Fed will cut the rate or not?

This is a very interesting time that Fed literally controls the stock market, not only the direction of movement, but also how much it will move.

My proprietary daily Smart Money index indicates that the Fed will cut and the market will soar.

Since Cramer's dramatic performance of crying wolf, the Fed has no choice but to lower the rate, everybody is expecting for a cut, So Wall Street is controlling Bernanke.

Not only that, the smart money has already figured out the consequence of the cut. Can you see why the dollar is at historical low and oil is at historical high.

** Here is a quote directly from the Chicago Board of Trade
website:

September 17: 50% for -25 bps versus 50% for -50 bps.


There is a 50/50 chance between a 25-basis point cut and
a 50-basis point cut. From this data it would seem to me
that anything less than a 50-basis point cut will disappoint
the market. On the other hand, if the Fed indeed decides
to cut the funds target rate by 50-basis point, it will be a
positive surprise for the markets.

One might argue that the Fed can literally control the direction
of the markets tomorrow - depending on which string they decide
to pull on. But will they cut 50-basis points when gold, oil and
other commodities are at record-highs AND the US Dollar is at
record-lows?

It pays to follow SMART MONEY,

Mkt Swimmer

SCR - Official Winner Today!!

Crystal Ball Worked Again:

Click her for SCR Chart

May force be with us forever!

Sunday, September 16, 2007

China Picks

PTR, SCR.

Please leave comments, if you may.

Mkt Swimmer

O. J. Simpson is Arrested in Las Vegas

O.J. Simpson faces charges over Las Vegas robbery
Sun Sep 16, 2007 5:29 PM EDT

Here is the YouTube video:

http://www.youtube.com/watch?v=aEPGibIbRHs

If convicted he may stay in jail for 3 to 35 years. CNN Report.

He was arrested in Las Vegas, I am preparing for a report on how gamblers beat the Blackjack game, for stock market money management -- A Tale of Sin City.

Report later,

Mkt Swimmer

Guru View 2



As I said before, the market is in great confusion right now. Will FOMC cut? By how much?
I don’t think even Bernanke knows. But --

- The 30-day Federal Funds futures:
* there is a 42% probability of a 25-basis point rate cut
* 58% probability of a 50-basis point rate cut

Be careful, rate cut has already priced in. If rate cut does not materialized, market will drop!

- Big players (commercials):
* COT chart for the Nasdaq 100 looks bullish
* COT chart for the Russell 2000 is finally starting to perk up
* The Dow Jones COT chart continues to show no signs of life
* S&P 500 COT chart, we see some commercial selling in the last two weeks, but if we look at the 3-year chart, once again this index remains at historically bullish levels in terms of its NET-commercial position.

- VIX
Commercials continue to be sellers of the VIX at the current levels. What I find interesting is that large-traders had their largest net-short position when that VIX was at yearly-highs above 30. Meanwhile commercials had a large net-long position at this exact same time. Were the large-traders right on this market, or were commercials simply hedging risk? From a classical COT setup this market looks bearish: commercials are sellers and large traders are buyers. Come Tuesday, we'll see for certain...

- Gold: Gold's price chart is very similar to oil's, in that they are both sitting just underneath record levels. The trend for gold is clearly bullish, as we broke above key resistance levels at approx. 689 & 699 and never looked back. Commercials are clearly selling into this rally, which is their typical behavior. But as long as gold holds above its support (689/699), we are either going to breakout above 730 near-term, or consolidate first & then breakout above 730. I think gold will consolidate first - before breaking out, but any-body's guess is as good as mine.

China Syndrome Part-II

In earlier writing:

Will China be the next super power? I don't know, I only remember Napoleon once said, "When China wakes, she will shake the world."!!!

Skeptical?

China skeptics still manage to make a living by comforting investors afraid they have already missed the opportunity to profit from China. Joe Studwell, a British freelance journalist, wrote The China Dream in 2002, characterizing China as a dream that would turn into a nightmare for foreign investors. He depicted GM’s investment in China as a disastrous decision, prophesizing that GM would meet their target of one million in annual unit sales only in more than twenty years ahead, in 2025. Yet three years after the publication of his book, GM reported that China’s total vehicle sales neared 7 million units, and GM’ s sales rose 35.2 percent on an annual basis to a record 665,390 units. GM now makes more money in China than in North America, a reality of which GM’s stockholders are painfully aware of.

Studwell at one point worked for the Economist, which also ran articles that predicted China’s collapse into smaller self-governing states. As recently zhanga’s 2006, Barron’s ran a cover story called “What Could Go Wrong With China?” even as China expanded at an 11% annualized pace that year. The article’s author, Jonathan Laing, correctly points to three challenges China faces: an aging population, environmental problems, and corrupt government officials. Yet he misses the more obvious trends: there are hundreds of millions of rural dwellers not subject to the one-child policy eager to replenish China’s labor force for decades to come; China’s environmental problems present a huge opportunity for foreign companies that specialize in the area of environmental solutions as well as alternative energy; and the same sense of corruption was pervasive a decade ago in Hong Kong, two decades ago in Taiwan, and perhaps a century ago in the United States.


But, Jim Rogers, the legendary "Quantum Fund" cofounder (together with Soros, will feature later) and the best seller book author is definitely a bull. He commented in his new book:

If the twentieth century was the American century, then the twenty-first century belongs to China. Now the one and only Jim Rogers shows how any investor can get in on the ground floor of “the greatest economic boom since England’s Industrial Revolution.”

--Source:
"A Bull in China
Investing Profitably in the World's Greatest Market "

He is so bullish on China, he call himself "THE BULL OF CHINA". He will sell his residence in NY and he move to any Chinese speaking community which is close to China if other conditions are met. The latest words are he will move to Singapore:

‘A Bull in China' Leaving New York for Singapore on The New York Sun September 14, 2007 edition


His doughter was born in 2003, and he hired a Chinese speaking nany and tutors and made clear that they can only speak to her in Mandarin. This is what he said in his new book:

I was once skeptical of China too. In fact, when I appeared as a featured guest on China Central Television’s flagship program, Dialogue, to discuss China’s stock market in the spring of 2004, the host was indignant that I was predicting stagnate growth for at least another year or two. The producers of the show were so horrified that they temporarily censored it and wouldn’t air it. But they did eventually air it, after the market tanked just as I explained and was headed for the recovery I also predicted would happen. You see, I am far from pessimistic about China’s growth. In fact, I am so optimistic about China’s long-term prospects that my daughter, who was born in 2003, is learning Chinese. Her Chinese nanny speaks only Mandarin to her, and I expect that she might learn Chinese before she learns English. In her lifetime, Chinese will be the most important language in the world, next to English. I have said, and I repeat again, if you are young and ambitious, learn Chinese. If you have ambitions for your children, persuade them to learn Chinese.


China’s economy is a train about to leave the station. And it’s not too late to catch the train if you haven’t boarded yet. China’s ripe for demand-driven booms in many sectors and will cause its fair share of demand shocks in the commodities markets.
How are investors to benefit from China’s growth? There are many misconceptions about China’s foreign investment policies, not the least because the government keeps changing them. This book aims to give an overview of the possibilities in investing in its growth.

-- To be continue

Saturday, September 15, 2007

Smart Money Report

According to the Commodity Futures Trading Commission (CFTC, A U.S. federal agency established by the Commodity Futures Trading Commission Act of 1974), here is a picture of how the commercials, large traders and small investors betting on the futures market:

On 9/13:

NASD-100: Commercial decreased slightly to 25,680
Russ-2000: Commercial increased to 9,224
SNP-500: Commercial decreased from 11,980 to 6,800. This the second week in a roll.

Guru report will follow.

Swimmer

Friday, September 14, 2007

Special Report

GSH is officially an winner again, congrats for the ones bought it in the morning, see the chart:

Please click here for GSH Chart

I categorize this kind of reports as "Crystal Ball Report" from now on.

Cheers!

Swimmer

Thursday, September 13, 2007

The China Syndrome

An earlier poll indicated some interests in Chinese stock. Also I saw some new visitors came in from a different world (tech guys), none of them stayed very long. Those were Microsoft technocrats who have more fun to hack a piece of Java code than to read our oil future contracts, or to second guess if Fed is going cut the rate or not. It's true to say that my "funny" story about Cramer did not draw a lot of crowd, but I still need to put out something which can appeal a larger audience, humor, jokes, anything goes. For the hardcore market watchers, you can still find my Guru Views and Stock Picks easily, look for titles and labels, I usually put them towards the end of a story. So if things get out of hands, please let me know. I don't know, you guys stop making comments now, let me wonder if I am slowly losing you?

Well, there is a lot of "China" in the news media lately, most of them are not particularly "good". I remember one famous stock market commentator commented: China, STOP KILLING ME!!

He started like this: when I watched TV, they mentioned about cat food imported from China... poisonous..., I looked at my cats, they lied on ground motionless. I checked with the cat food I got from Kruger, sure enough, it's made in CHINA.

When my wife went to the bath room to brush her teeth before sleeping, I jumped over to check out the toothpaste, sure enough, it was made in CHINA, too. I dumped all the toys we bought for our kids, feared about the lead paint. Finally I got up and went to work, looked at the chart of Shanghai SSE index, oh my god! It's parabolic rising, not sustainable. I wanted to short this thing, but I can not buy or short any A-shares, the only ETF came close to it was FXI. Finally SSE index crashed in Shanghai market, but when I looked at the FXI, it's even creeping up, FXI did not correlate with SSE. So CHINA, you want to kill my CATs, my kids, my wife, and also you want to kill me in the stock market!!!!!!!

No kidding, he was lucky, if he could play A-share in Shanghai market, if he shorted the whole index, he probably lost his wife, his house and bankrupt his company if he is stubborned enough.

Do you know how much Shanghai index increased last year? And this year? Let me check it from Yahoo (the symbol is 000001.SS, creepy enough, best kept secret)!

Okay, here it goes, from Jan. 2006 to Jan. 2007, SSE increased 250%



From Jan. 2007 to date, remember, not the end of year yet, SSE has been doubled again!! From 2,500 to just above 5,270. Well, last Friday closed at 5,400, it dropped a little this week.

So politics is politics, some thing like "Wen Ho Lee", Monks tried to buy Clinton, influencing the election, Chinese spy's every where, stealing W-86 secrets, lead paint, which is ridiculous -- why they export toy with lead paint, no excuses. I am not here to defend China. But, business is business, we can not ignore the fact that China has 1.4 billion people, China is the "de facto" manufacturer of the world. In the last 15 years (probably, at least 10 years) the economy has grown at an annual rate of 9 - 10%, this year they were talking about 11%!!!

Will China be the next super power? I don't know, I only remember Napoleon once said, "When China wakes, she will shake the world."!!!

Don't forget Olympic Games 2008, which will be in Beijing, the Chinese Yuan($) inevitable revaluation step by step. The market Guru - Jim Rogers will sell his residence in NY and move to Shanghai, he has a young daughter and he hired several tutors to teach feverishly her Chinese since she was 3 month old.

Well, this is probably too long for average folks to bear through, to sum up, there is a lot of money to be made in Chinese stocks. I will feature a series about China and it's economy in future.

For now, buy -- ?? let me run my computer program.

It came up with PTR and GSH

Have fun,

Mkt Swimmer

Special Report

CMI, I selected from Stockbee list yesterday with my multi-dimensional spreadsheet Technology, is officially a big winner today!

CMI Chart

Thank you for watching and may the force be with us.

Mkt Swimmer

Show Me the Money

Crude oil pressed into 80 on Wednesday and closed at an all time high as OPEC lifting production quotas. Strange, even when driving season is over, no major hurricane. True, the crude inventory decreased 6 million barrels, but did the press tell you the inventory is still higher than 5 year average? Wasn't at the same level last winter the big guys tried to knock oil down to $40 when OPEC cut production, the press say OPEC always cheat? Now OPEC not only cheat, but also made public that they all agree to increase the production, but all the sudden they all say bullish.

How can you keep all of them in check and find out what is moving the market, who is lying, who is telling the truth? Somebody know all of these, you don't even calculate any of these. See the chart below for a clue:



Buy PGN

Earlier picks, CLN, CMI did well,
ANN -- the insider pick - breaks out!

Cheers,

Mkt Swimmer

Wednesday, September 12, 2007

Traffic Report

Some of our effort increasing readership has paid off,



20 countries now, including a few new friends from Japan and Slovenia, welcome!



Can you see your city on this map?

Picks Explained

CMI was from Stockbee list
DRL was Swimmer Contrarian pick
ANN was Insider pick

For now, it looks Contrarian and insider work better than Stockbee.

Cheers!

Who are the Perma-Bears Anyway?

A gradual procession of super bears has been quietly admitting they've been wrong in their bearish assessment of the stock market. As the major stock market indices continue to push to higher highs and as market internals continue to reflect a stellar market condition, even the most stubborn of bearish traders and market commentators have been forced to reconsider their positions. Slowly, and with little fanfare, they've been covering short positions.

Yet these same died-in-the-wool bears refuse to turn bullish and are now standing idly on the sidelines watching stock prices move ever higher. If they can admit they were wrong to sell short, why can't they bring themselves to become buyers in what is obviously a strong bull market? That is the question we'll examine in the commentary that follows.

While discussing the issue recently with friend and colleague Bud Kress, a Wall Street veteran, he offered these comments on the bears: "The perma-bears live in their own little world, wrapped tightly in a cocoon womb." I couldn't help but laugh when I heard this statement. We then began to openly ponder why certain high-profile "perma-bears" have maintained an unshakeable bearish bias for the past few years even as equity prices and corporate earnings have climbed relentlessly. Our conclusion was that there must be a "cult of the bear."

Tuesday, September 11, 2007

Mark Twain --

To paraphrase a famous line from Mark Twain, "The rumors of our death have been greatly exaggerated". Perma bears have tried to bash the market down three times in the last a few month, in order to get a what they called "correction". They have shorted the market since 2002, and consistently being wrong.

The first effort was the famous "inflation scare" -- if the oil goes up to $60 a barrel, stays there for 3 month, the whole world economy will crash! The reason is, if the oil price is high, consumers will pay extra for gasoline, they don't have enough money to buy consumer discretionary products, the industries will go down to hell. They predict that the high gasoline price will penetrate to milk price, every thing, then the whole world will come to an end.

Sounds familiar? Remember the Y2K problem? Made a few poor fellows went to the deep mountains, carried the whole years caned food and spring water enough for a year, to avoid the nuclear catastrophe, the religious mania was so convinced... no I don't want to be too offensive.

The second theory was the Fed is always wrong, they will keep raising the interest rate to tame inflation, they always over do it, since they are looking a bunch of lagging indicators, when those indicators are just right, the economy is on the verge of collapsing. So history has constantly proved this will happen every time in the tightening cycle... blah, blah, blah... They were wrong! Burnanke, right or wrong stopped long before the economy started collapsing. So the perma bears scratching their heads...

The third one is the one we are experiencing now, subprime crisis, they invented the theory one year ago. Economy goes in cycles, credit expansion, a lot of hyping, loosening lending standards, potential disasters! What happened is, people watched the house value shot up, they started pull money out of stock market, from their 401K's to invest in the housing market. The mortgage industries mushroomed. They lended money to the people who could not afford buying, but they said it's okay, because the house value increased, it can pay itself. They don't have enough income, it's okay, we don't check your income, instead we charge you higher rate (no, actually lower teaser rate first, increase tramatically later). Then the housing market crashed, the owners were hit with the higher rates, they can not afford to pay, they walk out of their houses, filing Chapter 11! Now it's the banks (and the hedge funds bought the CDO's) who got burnt.

But if you listen to the Gurus, Warren Buffett alike, this is the time they buy. Cramer banging his head against the wall was his effort to make sure his buddies get the a good deal. Now Burnanke and Co. unwillingly, but it will happen, bail out the hedge funds, mortgage lends. Maybe if they feel that they can be saved every single time, they will run even higher risk in future, eventually the whole market will crash, but not this time, it's time to buy. When you buy, just buy the following, when all the geeks united together, we can beat the house!

CMI
DRL
ANN
AnnTaylor Stores Corp, A director has bought 35,000 shares.

VIX is trying to fill the gap:




Just came back, a lot of miss spells, but I have to go...

Good night,

Swimmer

Monday, September 10, 2007

Poll

Do you want more of --

Market comments
Picks
Guru views
Chinese stock picks
Gold stock picks
Stockbee list pick


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Market may be up today,

BNT - Strong Buy

Picks

The market condition is getting really bad, even the big gurus are getting confused. They have no ideas if market will go up or down. Economic numbers came out on Friday, usually it's a bad news becomes good news situation, unemployment is up - gives Fed's reasons for a rate cut. But they can not ignore the fact that we may be headed for a recession. While nobody knows for sure, it's important to check the smart money. They have the most information, the fastest computer, if they find it out, make a move, we just follow, as simple as that. So please check with me later, the smart money info-outlet.

Previously Fed was really reluctant to cut rate, people blamed them for cutting the rate to save a few rich guys, the hedge funds, betting the wrong way on subprime. Funny, the big guys can be wrong too, Santa Claus went wrong, what can you say. Well, now Fed has evidence that subprime is spreading to average folks. Now the rate cut is a sure thing. They only debate whether it's a .25 cut or 0.50 cut, or some even expect 0.75 cut, will put fuels in the economy. But because the employment picture is so bad (give me a break, can it be worse than 911? Totally psychy!) the market had a hudge shock! So Dow went down 250 points. VIX got a nice gap up, as said before the gap will be filled, that's when market rally. In other words, market over-reacted the "good news" of fed sure cut, will get a rebuttal, the question is when?

Now Swimmer Warren Buffett longs are:

PTR, C, JCI -- you should not trade on these, buy and hold for long time, these companies won't go bankrupt even economy goes sour.

Swimmer Research longs: these you trade, short momentum:

CLN

Swimmer short (short term as well):

SWN

Nice day!

Guru View

Insider Guru expressed his opinion on market direction:

** The NASDAQ-100 continues to show commercial
accumulation, while the other indexes are largely
unchanged. Coincidentally - or perhaps not - the
NASDAQ-100 index is displaying relative strength
in comparison to the other indexes.
In terms of the market's trend, the bottom is not
yet confirmed. The Russell 2000 tested critical
resistance at 800, but failed to decisively close
above this level. On the downside, the indexes
are holding well above their August reaction-lows,
so before we break out of August's range I remain
neutral on the stock-market...At this moment in time
the COT charts support a bullish resolution unless we
begin to see breakdowns in commercial net-positions...

** The VIX has rallied to an area that I think may act as
resistance right around 27. Be aware of several unfilled
gaps on the VIX in the 17-19 range; a decline in the VIX
to this range would most probably coincide with a sizable
market rally.

** Crude oil has broken out above short-term resistance at 74.
We are now very close to re-testing resistance at 78.
Meanwhile, longer-term resistance is at 80, so if we were
to break 78 a re-test of the 80 level is a logical assumption.
Thus far, the COT chart for crude looks constructive: it looks
like this market may need a short rest before breaking out to
new highs. The only thing that would change my mind is
a price breakdown below 69 or significant commercial selling.

** Gold is finally starting to break out of its trading range. We
are currently testing resistance at 700. And while the COT
chart is not forecasting a big rally in gold, we must respect
the trend which is now starting to point UP. A very key
area of support is right around 688-689. If we hold above
this level, then we are probably headed for a retest of a
longer-term resistance level at 725-730.

Sunday, September 9, 2007

Welcome --

Welcome you all, friends from all parts of the world. This is a sample of recent 200 visitors from last 2 days according to the traffic meter:



If you came to my blog, chances are that you are looking for new investing ideas which can keep you afloat in the financial market. You are in the good hand! You will keep getting the free service, watching smart money, stock picks both for long and short.

It has been a month since I put out the first blog, using swimming as an example for investing in stock market. Now we have 580 of friends coming from all parts of the world, visited Swimmer site at least once, total traffic pasted 2,000 page views.

In an effort to keep you coming back, I created polls, finding out what your interests are, making improvement on my website. The newest improvement includes:

A new page design, which helps to get rid of trancation on the right side;

New traffic meters keep tracking both unique visitors and total hits;

New feedburner for RSS feed, now you can subscribe on you RSS readers;

And a dictionary and a Google search engine interface, and you can search both Web and Site contents

We will work in several strategies:

Stockbee's list
Smart money chase on Buffett
Short on subprime and more...

I will use the following labels:

Investing Methodology
Smart Money Chase
Market Picture
Stock Picks

Cheers,

Swimmer

Saturday, September 8, 2007

Smart Money Report

On NASD 100:

Commercial added 2,000 contracts, net position up to +26,000; large trader reduced 18k to net of -21k.

On SP 500:

Commercial reduced 12k, net position down to +12k, large traders reduced 2k down to -46k, small traders however added 10k position for a total of 34,000 contracts.

Are they trying to tell us anything?

Do you want me to work on Stockbee's "Gold Stocks Breaking out" list to select 1 or two winners?

Yes
No
Don't care


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An overwhelming yes, here are a few you should focus on:

IAG
TRE
VGZ

Which One Should We All Buy Together, pleas cast your votes!!!

IAG
TRE
VGZ


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Have fun,

Swimmer

Thursday, September 6, 2007

Making Sense from the Stock Market

AAPL announced new product yesterday, the stock dropped $7.5, and today went down further, another $1.75. So what happen? We said technology will be the leading sector, we say Steve Jobs is most admired tech guru, certainly he touched anything, anything will be gold! iPod, iPhone, you name it. You can blame buy on rumor, sell on news. But when I looked the Put/Call configuration, people bought 600 thousand calls and less than 460 k puts. Too much optimism is not a good thing and the maximum pain pointed to a disaster.

But how can we predict anything like this? Well, you can't. You say you can use super computer to forecast weather, because the natural phenomenon observes physics laws, but human behavior doesn't. This does not mean we need to be clueless when we do our investing. I am here to check all the numbers for you.

Smart money covered some of their short positions and the general public remain scared, this is a perfect condition for market to go up. Sometimes the macro economics numbers don't matter. As you all know that government will release the unemployment number tomorrow, will it be good or bad? If the market manipulators want the market to go up, good news is good news and bad news is good news as well, if you know what I mean.

Several things came to my attention, gold shot up as well as the following stocks:

CSUN
BIOF

Are you in favor of increasing Swimmer readership?

Yes
No


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Traffic report:

Yesterday (Thur) we had the second highest traffic, adding 64 unique visitors (new friends):



And today so far we added 24 unique visitors, plus 11 re-visiting friends.



The total hits (all the visits including people coming back to visit us) is getting close to 2,000. I put another traffic meter on the bottom which counts the total traffic. To be factual, I set it in such a way that automatically excludes all the traffic from my computers. Let's celebrate our success, again I would appreciate your effort to attracting new visitors. At this point, the more traffic we are getting, the more successful we will be.

Smart Money Chase

I looks like that the market will drop further in the short time frame. In the long run, smart money sold off the VIX, which means they expect volatility will be tamed. New short candidate include:

CSG
WCI

Long:

PTR
CNTF

PTR is an interesting story. If you are loyal Mkt Swimmer's follower, you know I shorted the stock from 155 down to 140 (Buffett sold some shares on Hong Kong market), I chickened out at that point. The stock went down a little more and then got a violent bounce at Aug. 16th. I am looking for opportunity to buy share to hold long for this one, because there is a bank bought even larger quantity of shares right after Buffett selling. BTW, Buffett still has PTR, just reduced his holding. If I am not mistaken, PTR will go back to 160, and will make a move to $200. May the profit be made yours?



Swimmer got more than 500 followers now, yesterday's web visit is a little less than 70, the record we created the day before. Anyway, the general trend is picking up, I am pretty happy. Remember, I you want to do a little advertising, send links, emails to your friends, it's okay with me. I want to check with the big guys and let you know what's happening behind the closed door, you will make more money. Let's hang out on this digital village and communicate to each other, if we stay together, we can get some money back which we deserve. Geeks will take the world!

To be continue, a little poll:

Do you want more Long or Short picks?

Long
Short
Buffett video


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Wednesday, September 5, 2007

Alternative Plan

The funny thing is, yesterday we got two bad numbers for macro economics, but the market soared. Wall Street's twisted mind said the bad numbers give Fed more reasons for a rate cut. I don't hold my breath for that, but if you read my blog before, you knew that smart money was right again.

Consider the fact that we are up for a few days, all the gaps on the volatility index (fear index, $VIX) are filled right now.



Institutions have not participated in the rally, they probably have other plan. Last a few days can be a short covering thing. NFI turn out to be a bad idea, poor fundamental stocks should be shorted. My apology. I should stick with my computer models and engine results from now on.

In terms of blog traffic, yesterday was a best day ever,we had 76 visitors from 7 countries, Belgium and Ireland were new. Most of you came from US and Cananda:



I am excited as usual, so if you believe the rally has some leg, you can buy

PPL

Otherwise, you may choose to short the following:

JRC
RYI
ARP

Enjoy your day,

Swimmer

Sunday, September 2, 2007

The Crystal Ball

Hi Everybody,

Have you had a good long weekend so far? I saw you are nodding, good. Swimmer went to a nearby sea shore city and had some fun in boat-riding, got wet with the family, a good kick-off of the holiday long weekend.

Site traffic is all the way down, I only got 5 people visiting me yesterday, one friend from Germany. That's a good sign, people are enjoying the long weekend.

The poll said you predominantly like to explain a little more on stock pick, thank you for your responses. After all, it's your site, if you have more enthusiasm, interact more, I will post more. I hope I can post some winning strategies, so we can all rob the bank (legally of course)!

Market Posture (Smart Money Trail):

President Bush and Big Ben Bernanke made some positive comments, expressed their willingness to do whatever possible to help on subprime/mortgage crisis. The short sellers started panicking. Actually they are angry, they angry why Bush/Bernanke and the Co. will bailout the crazy mortgage lenders and risk taking hedge funds (it would be a nice story for another post -- but you guys don't want the funny stories any way, I will keep that in mind). Well, well, angry is one thing, they are too greedy and shorted the financial stocks too much for too long, they will be squeezed, some strategies will be posted later.



Well, smart money added more positions nearly to all major indices, Dow, NASD. Every time is different. Last time in March, the smart money bought aggressively on Russell 2000, which was a very nice indication for market bottom. But this time I did not see this kind of big jump in any of the major indices, but the commercial bought big way (the week of Aug. 16th) on the Goldman Sachs index, that was a clear cut signal. Market is the market, whenever you figured out its way, it will change. The only concern I have is that NASDAQ is right at Resistance, one of the smart money index indicating short term overbought. Likely scenario is to pull back a little initially then market moves up.

Strategies:

Swimmer's Rocket Scan (looking for strong stocks) generated ALTR. But they will report earning on Sep. 5th, so you need be careful. Last earning was a positive surprise.

Other safer bets are: C, JCI based on smart money trail.

NFI is interestig, deserves some more discussion.

On a side note, hott wanted me to look into some home builders and mortgage lenders and give my opinion. I looked at them today with my spreadsheet. Remember, none of them have any fundamentals to speak of, all of them will have tough time to meet their numbers. But for a short time frame, some of them are oversold and a rebounce is due. In particular, NFI, it got 92% of it's float (total number of shares available for common market. That's stupid, how can you short it to almost 100% of float without being crushed by a squeeze!) shorted.

Well, data from another source:
NFI $ 8.49
Shares Short 8,104,600
Days to Cover (Short Ratio) 1.8
Short % of Float 92.20 %
Shares Short - Prior 23,630,500
Short % Increase / Decrease -65.70 %
% from 52-Wk HIGH ( 32.88 ) -287.28 %
% from 52-Wk LOW ( 3.25 ) 61.72 %
Price % Change (52-Wk) -72.80 %

Look at the chart, it went down as low as $3-4 on 8/16, then it bounced back to near $9 as the shorts are covering (from 23.6 millions to 8 millions). For a few brave ones, they made more than 100% return (but very risky). Now pull back a little, money flow is positive, it may be able to wage another comeback.

Simply put, if you believe there will be an interest rate cut, if you believe Bush is going to take some actions to save the mortgage lenders, for a short term buy, NFI is a good choice, relative to other stocks on my spreadsheet (I collected more than 20). But if you are Buffett type investor, please do not touch this one.

It's a new month now, I would like to find out what you like the most:

Which articles you like the most?

The Number Crunching Game
Happy Weekend
The Poker Game
Smart Money
Cramer Cheerleader
Bear Trap
Tax Rebelling
Short Side Story


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