Jack Stevison

We’re not exactly there yet, that would be 80+, but this indicator is looking very much like it wants to go coast to coast on this bullish run. What is it? It’s the NYSE - 10 Day Moving Average of Record High Percent Index, or in equation form - 10-day moving average of [(new highs minus new lows) divided by (new highs plus new lows)], plotted in Point&Figure format.

You have to love the default bullish price objective for this chart, which says “204″ on the StockCharts.com version.

P.S. - Since it’s a ratio, one number divided by another, it can’t get higher than 100.

Happy trading.

On the stove today is Wheat Beer.

This is the traditional German wheat beer. The yeast will produce clovey-spicy flavors. This beer has few bittering hops. Hefeweizens will have suspended yeasts which make the beer cloudy and produce bread-like “full bodied” flavors.

6.6 lbs. Wheat Malt Extract
½ lb. Pale Grain - 2 row (cracked)
½ lb. Malted Wheat Grain (cracked)
1½ oz. Hallertauer (whole hops) boil
½ oz. Hallertauer Hersbrucker (plug) finish
1 pkg. Wyeast Liquid Yeast - Bavarian Wheat or Belgian Ale

Place grains into 1½ gal. cold water. Heat to 160ºF. Remove from heat cover & allow to sit for 45 min. Sparge with 1 gal. 170ºF water & return liquid to brewpot. Add liquid malt & 1½ oz. hops to brew pot. Return pot to heat & keep at low boil for 55 min. Add ½ oz. hops & boil until plug opens up. Remove from heat & steep for 3 min. Strain into 2½ gal. cold water & pitch yeast when cooled to 80ºF or below.
Yields 5 gal.

This is the first time I’ve brewed the wheat beer since 2006. The past two times I tried this beer I was in a hurry to sample it and didn’t give it enough time in the fermenter. I’m much better at having longer ferment times now than I was then, plus I still have the Belgian Three Layer and the Scottish Export coming out of the rotation soon so I should be able to restrain myself with the wheat.

Happy trails.

The true inflation rate right now is 4.94%.

I did not make any hedonic adjustments.
I did not exclude food and energy.
The idea of a “core inflation rate” is moronic and very, very misleading, even downright deceitful.

I simply took the growth rate of the public debt over the past year (money created out of thin air) and subtracted out the historical growth rate of the population.

a) May 15, 2008 debt to the penny: 9,352,287,132,675.25
b) May 15, 2007 debt to the penny: 8,803,253,918,300.67
c) historical growth rate of population: 1.3%

growth rate of national debt = 6.24%;
6.24 − 1.3 = 4.94%

Anything else you may hear from the government regarding price inflation is a big, fat, huge, honking lie.

The end.

Read this article: Bernanke Requests Power to Pay Interest on Reserves

Selected quote from article:

May 16 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke asked Congress to give the Fed immediate authority to pay interest on reserves deposited by commercial banks, seeking to streamline efforts aimed at alleviating credit strains.

~snip~

Interest payments on reserves may give policy makers the ability “to inject potentially vast sums of money into the system without having an impact on the federal funds rate” said Tony Crescenzi, chief bond market strategist at Miller Tabak & Co. It would also “put a floor under” the rate, he said.

Congress would need to approve the accelerated timetable for the payments, which would then require the president’s signature.

Banks are required to hold a proportion of their customers’ deposits in an account at the Fed. If the Fed paid interest on surplus reserves, banks would be less inclined to dump the funds into the money markets, pushing the federal funds rate lower.

Question for you.

From where or from who does the money come to pay banks interest on reserves deposited at the Federal Reserve?

This is an open book quiz.

I have a guess but I want any and all passers by to offer their guesses.

Thanks.

i’m back to blogging as you can see by reading this post. my first act, aside from rebuilding the blog, is to participate in the Ticker Sense blogger sentiment poll that takes place every week. the guess is for what bloggers think about the S&P500 for the next 30 days. i will never choose neutral. you know my pick - about ten minutes ago i answered the poll for next week. though i can’t prove it to you, i’ve been short-term bullish since march 24th and now i’m over it. i think the current bull move is extended and will roll over shortly, but then again i could be way off.

comments are allowed upon my return in case you haven’t noticed. have your say, but try to keep it civil. though i can cuss like a sailor (i once was one), i try real hard not to do that here as some of my pg friends and family read this blog.

in a nod to my friend mike over at hedgefolios i have decided to type this post in lower case. why?, because that’s how we format our e-mails to each other and i’ve actually grown to like the format a lot. i can let my fingers type almost as fast as the thoughts pop into my head without having to worry about… doesn’t matter. i’m not trying to sell you on the idea. i like it, that’s all.

i used to ramble about the economy and the stock market to the exclusion of everything else. i even had a subscriber section attached to this site for awhile last year but was immediately tired of having to stick to a schedule for my blogging. my writing is a hobby more than anything else, though i really enjoy the fact that my writing has made me a little money through the sale of a book that i wrote for newlyweds, still available via the link in the sidebar. yes, it has proper grammar and capitalization in it.

what is different about this blog now, along with more beer and running stories, is that i will no longer criticize other market pundits, unless they say something especially egregious about the average joe like one particular shill did last summer. i knew this guy would be proven wrong and so did the little guy. i just have a few words for mr. shill that i have to put in an acronym to live up to my pledge of no cussing on the blog - stfu

on a positive note, as i said, i am only going to ramble away about my brewing, my training in preparation for the gasparilla distance classic 15k, and some market and economic commentary peppered with lots of sarcasm. and there will be no particular schedule to things i say or want to talk about here.

if readership grows, which i doubt because i seem to have the same 300 readers no matter where i go or how long i stay at this activity, then we’ll see what becomes of this blog as i go along.

happy trading.

happy trails.

and

relax, have a homebrew.

the next post to this blog will not have any commas, and may also be in lower case.

At some point during this bear market I had shared a chart and said that I expected the S&P500 to be rejected at its 200-day moving average, and I think my exact words were, “with extreme prejudice.”

Well, my bad. It didn’t make it that far, yet.

We’ll have to see if this was the top of the bear market rally or just another weigh station selloff before more unrealistic expectations of rosy economic conditions set in and prevail.

Hold your breath.

Happy trading.

I read this morning that one of the oldest, wait, make that the oldest, market newsletter writer has selective memory: Advisers in Wonderland

In his article, entitled “A Rally With Serious Muscle,” Russell argued that, not only are we in a bull market right now and that “new highs are coming,” but also that “the great bull market that began in the early 1980s is still intact.”

Those are headline-grabbing pronouncements, to be sure. But I don’t think that they were what raised the most eyebrows. After all, he has been saying much the same thing for several weeks now.

Instead, what caught many investors’ attention was the following Russell sentence: “Interestingly, at the 2002 low… I believed the bull market was still in its ‘expensive’ and speculative phase, and that there would be a major recovery, with probable new highs.”

Oh yeah? That certainly wasn’t my recollection of what he was saying at the time.

I’m not one bit surprised by this. I subscribed to Russell for one year, once. When I learned that he had over 8000 subscribers, a number for which he was quite proud, and made a point of mentioning sometime during my subscription period, I quickly did the math and learned that the old man was making $2 million dollars a year to ramble about the markets and basically say whatever he wanted. His hook is the Primary Trend Indicator, or PTI, a magical potion of calculations that tells him, and his subscribers for a fee, if the trend is bullish or bearish. But make no mistake about it, the PTI is a magical formula hidden somewhere in a vault with the magic formula for Coca Cola and the formula for Kodachrome. It’s that top secret.

I’m definitely in the wrong business. Instead of managing money I should be writing down my daily thoughts about the market, come up with a magical, mystery number and call it something like, “Stevison’s Ultimate Calculated Kondratieff Exponential R-multiple” enhancer, and charge an annual subscription fee, a big one.

But then again, I’d worry that only suckers would apply to read me every day.