The CheetahhhhhhhhBlog Mark III

So the had a pleasant 4th. Went to Spinny’s to buy good steak. Good steak is quite expensive out here. From New Zealand. It was tasty. We had lunch at the only proper pub in town, at the golf club. It was our first time in the pub and if we’d actually known about it before, we would have been regulars by now. It’s a very nice pub. We didn’t even notice it before because it’s hidden away. I only noticed it when we went to the main restaurant for lunch with my mom a few weeks ago. Anyway the pub is very pleasant, and they have Guinness on tap, which is a winner in my book, and great views of the golf course, which is actually… not stunning… but pretty nice. The only thing is, we were the only Americans there, and the place was full of Brits watching rugby, the Lions vs the South African Springboks. If I gave a swat about rugby, I’d actually have been cheering for the Springboks. They were getting slaughtered though.

I now get the Economist on my Kindle also, which is great.

I am an Obama supporter, so no knee-jerks please from anybody who thinks its sacrilegious to voice any criticism at all of the Left. Let me say it again. I am an Obama supporter. However I am a little bit befuddled that Obama seems to suggest to the American public that cleaning up the environment and reforming healthcare will not require any sacrifices from the average American’s pocketbook. The Economist predicts federal debt to rise to 87% of GDP by 2020, for example, and switching to cleaner fuels is good, but it will cost jobs as well as create them, and will be expensive for you and me.

I forgot to mention, the reason we’re in Muscat is because Van got bored. We woke up Monday morning after sleeping until noon. You’d think she’d have nothing to complain about with sleeping until noon. However she got on Facebook and wrote “I’m bored”. So I said, “OK, let’s go to Muscat.”

This was Scarlet’s, or new Kia Sportage, first big road trip. It’s a lot more fun to take a road trip in an SUV, I can tell you definitively. More room means you’re more comfortable. Scarlet is as always a thirsty girl, however, and it took a tank and a half to get there.

We’re at grandma’s house in Muscat. It’s hotter than hell here. I think it’s actually hotter in Muscat, I’m not sure but it sure as hell seems hotter. Grandma has gone crazy buying rugs in her house. They’re nice. We’re going to grandma’s rug store tonight, though I have a hard time imagining myself shelling out the cash for an oriental rug. They’re nice but I have other things to spend my money on.

Grandma went to work this morning and we went off to get breakfast. We got lost and ended up at the Grand Hyatt, where we had a $100 breakfast. I will say this about the Grand Hyatt. It is the fanciest thing I’ve ever seen besides, perhaps, the Vatican, and the odd European palace. It’s pretty fancy. Fancier than anything in the Emirates.

Now we’re going to take a siesta because it’s just too hot.

Not a lot going on with the Cheetahhhhhhh. We’re finishing up our Desperate Housewives marathon; we’ve got about 8 more shows to go. Van is getting nervous about what we’ll do when Desperate Housewives is finished.

The local Asian restaurant has expanded its repertoire to sushi. I was spoiled on sushi in Korea. Indeed I ate it every day. So I know how sushi should taste. And the unfortunate fact is, where the hell are you going to get fresh salmon in the Persian Gulf? Yeah, so we got sushi now, but its a little gamey. Better than nothing.

We are anxiously awaiting grandma coming on Wednesday.  She’s got our stuff from America. Bug in particular is waiting for his Jack figurine (from Thomas and Friends).

It’s gotten so hot that we have little desire to go outside. The apartment can’t really get cold, especially around midday, even with all the air conditioners blasting. I’m getting a little scared about my electricity bill.

Van thinks she will give birth early, and there is a bag sitting on the dining room table, ready to go for the hospital.

There was a nice rally on the stock market on Friday. Should we go long? I’d say no, and I’ll tell you why.

First, there are seasonal patterns, which I discuss below. Going only by seasonal patterns, I’d wait until Aug 1st at least.

Second, while there are reasons to be encouraged about the economy, there are also reasons to be cautious. We have moved past the shock of the mortgage crisis, the electroshock of the market losing 50% of its value, and massive fears such as talk of the government nationalizing banks. These things are behind us. And we have some things to be hopeful about. Liquidity is returning to the market. Uncle Sam is obviously not going to let certain massive companies fail (such as C) which is a pretty good reason in itself to be long. But we have some things to be cautious about still, such as inflation, nervousness about real evidence of economic recovery, and more to the point, the tendency traders will have to hit the sell button the minute they get spooked (because of all the money they lost Sept08-March09). So I would say we’re in for a volatile summer of sideways movement.

So I’d say a smart trader will be in cash, or (if an options trader) market-neutral, or (if an options or futures trade) long for Nov-Dec (the seasonal pattern of the Christmas rally).

A caveat here is that this rally has been rather unpredictable, probably partly because of massive government intervention. So perhaps we can’t use seasonal patterns accurately. Seasonal patterns assume the market is behaving organically. Indeed I wouldn’t be terribly surprised if I was wrong and the rally continues. In other words, my prediction here isn’t very firm.

The Fed had their meeting. As always, the stock market got very excited about it. This time we all knew the result in advance. I have said for several weeks now that I anticipate a decline. We’re down a bit, and I anticipate further declines or sideways movement through July. I’d say sideways movement is more likely.

My reasons for saying this are based primarily on seasonal patterns. Statistically, the market flattens or fades during the “summer doldrums”. Again, the old commodities adage “Sell in May and go away.” Part of this is simply the fact that a lot of financial people take a break and go lay on the beach at Martha’s Vinyard. Also, statistically the VIX generally sees a volatility increase from June-Sept, which means statistically the market tends to decline or move sideways. Seasonal patterns are something worth paying attention to. A number of studies have shown that if you buy and sell based only on seasonal patterns, you will be profitable.

Warren Buffet said yesterday on CNBC that he is having trouble seeing green shoots in the economy, though it will happen. I doubt I’d ever disagree with Warren. I’m taking a long term view. I anticipate general recovery next year. I also anticipate a rally Nov-Dec.

Currently I’m invested in an Aug RUT iron condor at 390/400/570/580, a C calendar at 5 for Jan 10/Jan 11 (this is the real long-term money play; I think I’ll make a lot of money from calendar rolls throughout 2011, in addition to the long option itself), and SPX calendar at 1000 for Dec/Dec05. I am also going to put on a Jul SPX iron condor at 970/975/805/810.

I hope you all had a happy Father’s Day. Bug told us in the morning, “My stomach is missing,” and then at night he started vomiting all over. This went on for a long time and so eventually we took him to the hospital emergency room. He now has broken blood vessels on his upper lip, which the doctor tells us is no big deal, caused by the vomiting, but they make him look like he has a red mustache.

I bought an exercise bike. I realized that the thing that’s holding me back from exercise is the damn heat. Today I biked for 23 minutes and burned 200 calories. Yesterday, 20 and 170. I biked while watching CNBC.

I’m a Sagitarius. If you didn’t know, we’re the philosophers of the zodiac. So anyway I took the “Which philosopher are you?” quiz on Facebook with some interest. I thought I would be pegged as Rousseau, but the quiz pegged me as Heidegger. I don’t know about that, as Heidegger is and always has been a bunch of gibberish to me. I tried to refresh myself on Heidegger on Wikipedia but my eyes glazed over in about 2 minutes. So I think the Facebook quiz is faulty. Really should have been Rousseau.

Well, we did it. Barney Live in Adu Dhabi. Van will be posting pictures in Facebook momentarily. What can I say about Barney Live. Well, that’s the price of being a father I guess. Bug was shocked and awed by the whole thing.

Last time we were in Dubai, we got Bug a Thomas the Train t-shirt. Today he wore it for the first time. He’s been strutting around all day in his Thomas shirt like the king rooster.

Dubai has a new motto and mascot. The mascot is some kind of strange yellow worm. The slogan is “Surprising!” Now you drive around Dubai there’s the strange yellow worm poking his head up. And to be frank, Dubai is really not terribly surprising. I’m not sure what advertising genius came up with this but he obviously hasn’t spent any time in Dubai. Indeed there’s really nothing at all surprising about Dubai, in fact it’s exactly what one would expect. If I was the advertising wizard in charge of promoting Dubai, I would have focused on something else, like the astounding amount of money floating around. Some kind of slogan about riches, excess, luxury, or something. Like “The world’s most luxurious city.” I don’t know if it’s true but Dubai is at least in the running for that title. Or “The new land of opportunity.” Or something. But “Surprising!” and a yellow worm? No, no.

I’ve been reading a lot of technical books about options trading. One interesting piece of trivia, options traded over the counter for a long time, but there was no systematized exchange until the 1970s. The CBOE was actually a smoker’s lounge in the Chicago commodities exchange. It was not until the 1980s (and PCs, I imagine) that there was actually a mathematical formula for pricing. Heh.

My mom is in the States right now and is bringing me a Kindle DX, which is the 3rd generation Kindle, and about the size of letter paper. I’m tremendously excited. I’ve been abroad for what, 9 years now? And most of it without a readable version of the New York Times or books I like. Reading on the internet is not the same. It’s unpleasant. In some ways the Kindle is actually better than paper.The only beef I have is that the wireless service works only in the States. What’s with that, AMazon? You create the ultimate gadget for an expat but you deny us the wireless access. Charge us an extra $30 and put Wifi in it for God’s sake.

I’m reading my favorite book of all time again, The Black Company by Glenn Cook. His Black Company series entertains me endlessly, despite having read it 10 times or so. I’m not a big fan of the fantasy/sci fi genre. Generally I lose patience with fantasy/sci fi books after 20 pages. But my favorite books all come from the genres:

1. The Black Company series by Genn Cook

2. The Assassin’s Apprentice series  by Robin Hobb

3. The Adventures of Fafrd and the Grey Mouser series

4. Dune series by Frank Herbert

5. Lord of the Rings series by Tolkien

Anyway Apple is coming out with a new iPhone. As is always the case, you buy a piece of technology and 30 days later it’s out of date. Actually I knew about the new iPhone but I also knew it would take a year or more to reach the Middle East, so I just bought the current iPhone and be damned. And in any case the new iPhone doesn’t appear to be anything remarkably different.

36 hours to go until we go to Abu Dhabi for Barney LIVE!!!!!!!! Van also wants to stop at the white mosque for a picture, apparently it’s the world’s biggest or something. It is pretty and rather remarkable.

Obama asked Twitter to stay online because it was being used as an important communications tool by Iranians. Article in today’s New York Times. I got on the Twitter bandwagon about a year ago. I’m not like Ashton Kutcher though (I read his Twitter feed for a few days) who informs you he’s eating a sandwich, now he’s taking a nap, now he’s annoyed with Demi… etc… however I get several investing feeds which are quite informative.

The Bug is into the Land Before Time and likes to walk around on all fours, pretending he’s a leaf-eating dinosaur. He’s right now asking me to be a “sharp tooth”, ie a carnivore dinosaur. My job is to growl and to chase after him.