2011-07-08th (Fri)

At the end of the previous trading session I had no positions.

I am currently in 100% Cash.

The media quoted today's employment figure as the straw that broke the camel's back.

I want to focus back on the economy, with employment as one single data point.  Fundamentally we are still fragile, but the stock market will continue to spike with each improving data point, and our job is to trade them for profit.

Article - "Stocks sink after dismal June jobs report - Dow, S&P 500 sink after a dismal jobs report shows slower hiring, rising unemployment rate"
http://finance.yahoo.com/news/Stocks-sink-after-dismal-June-apf-2073081885.html?x=0&sec=topStories&pos=5&asset=&ccode=

WTI Crude price movement continues to elude me, as inventory decreases at Cushing, Oklahoma.

Article - "Oil falls over 2 percent on weak US jobs report - Oil down more than 2 percent as US unemployment rate rises on surprisingly weak job creation"
http://finance.yahoo.com/news/Oil-falls-over-2-percent-on-apf-1124282111.html?x=0&sec=topStories&pos=8&asset=&ccode=

I am curious how markets will interpret China's inflation figures in Monday's market, clearly we expect another Chinese rate hike next.

I wrote on 2011-06-14th (Tues), if we assume the central bank of China's target inflation rate is 4% then we should expect continued tightening action.

If concurrently the desired GDP growth is 6% then it will be an extremely hard juggling act of injecting stimulus money in desired sectors of the economy, while building flood gates to prevent spill over of hot money into undesired sectors of the economy.

Personally I am not aware of any Monetary Policy that can achieve both outcomes concurrently, it must be accompanied by Regulation, Fiscal Policy of higher taxes and reduced spending.

Continued grow is necessary for China to avoid civil unrest.  Civil unrest is an on-going issue with economic development.  A small portion of the population must achieve wealth first before the masses can achieve wealth (2011-06-13th (Mon)).

Article - "China's inflation jumps to 3-year high - China's inflation jumps to 3-year high even as economy cools; food costs up 14.4 percent"
http://finance.yahoo.com/news/Chinas-inflation-jumps-to-apf-2505423913.html;_ylt=AoYf7RHwbRjLRAcVrfwtujKxba9_;_ylu=X3oDMTFkMjQ2YmdwBHBvcwMxBHNlYwNuZXdzSHViQXJ0aWNsZUxpc3QEc2xrA2NoaW5hc2luZmxhdA--?x=0

The next three articles caught my eye for it is the underlying Business Models that I am interested in.

Creating Customer Loyalty is the Holy Grail for marketers, I will keep an eye on LevelUp.

Article - "Challenge to Groupon's model with trio of deals - New site LevelUp challenges Groupon's model with deals that get better as you buy"
http://finance.yahoo.com/news/Challenge-to-Groupons-model-apf-2691432066.html?x=0&sec=topStories&pos=7&asset=&ccode=

Baidu does not make business decisions lightly, they use their internal historical data to gauge the profitablity of each business unit.  While there are Long Tail profits (Chris Anderson),  personally I believe that businesses who specialize and become the best in class will capture dominant market share and profits.

Article - "Baidu restructures to focus on 4 businesses - Baidu restructures to focus on 4 business units"
http://finance.yahoo.com/news/Baidu-restructures-to-focus-apf-1410522786.html;_ylt=Ag_D5NHY.lYF3cfZ_Q8PWu2xba9_;_ylu=X3oDMTFlMnVkaWU1BHBvcwMyMwRzZWMDbmV3c0h1YkFydGljbGVMaXN0BHNsawNiYWlkdXJlc3RydWM-?x=0

I do not understand the casino business, but I do understand Branding and the Luxury Business.  I continue to believe Big, Glamourous, Luxurious casino destinations will continue to dominate the market share and profits.  Smaller operators will eventually cut down on building maintenance because of declining margins, and once the establishment looks stale and uninteresting the customers will go else where.

Article - "3 firms want to build new, smaller casinos in AC- Hard Rock, Pinnacle, NJ locals want to build new, smaller casinos in Atlantic City"
http://finance.yahoo.com/news/3-firms-want-to-build-new-apf-2603456176.html;_ylt=AvuCu_1yOZ8JlzpihwT0z0Sxba9_;_ylu=X3oDMTFlZmk4MXJrBHBvcwM3MgRzZWMDbmV3c0h1YkFydGljbGVMaXN0BHNsawMzZmlybXN3YW50dG8-?x=0

I will spend the weekend researching the Thesis of a weakening EUR as ugly PIIGS recapture the media's attention.

I am currently in 100% Cash.

Our first line of credit was activated on 2011-06-16th (Thurs) and our second line of credit was activated on 2011-06-29th (Wed).  Although I am 100% in Cash, I am keeping the available margin for Monday's trading session.

Total equity is 15% of June 1st and we are committed to trade ourselves back to our High Water Mark.

Stay Tuned,

Jeff
(2011-07-08, 23:33 pm EST)