The Cafe my family owns put in their biggest order ever, they had to borrow space as it wouldn't all fit in the store, but it wasn't because of a huge increase in business. We are in south florida and specifically Boca Raton where a lot of people own a winter home, the summer here is dead. Sales drop significantly after Mother's Day, that's a Florida thing, however in Boca Raton where the snowbirds who can really afford two homes, the seasonal effect is even more exaggerated. So they (the family) went for deep discounts by ordering bulk which allowed items to be shipped bulk for much less money per product. I realize it's not the same thing, but the point is there can be all kinds of reasons for a build in wholesale inventories, not all of them are good.
This morning one of our benevolent wolves, George, sent me an interesting story that awoke Bill Cara in the middle of the night so he would put it to press. I don't agree with everything the guy says, but I do respect his opinions because he's kind of got one foot on each side of the game as he runs his own investment firm. I thought you might be interested in reading the story too.
The only argument I have with his viewpoint and traders that also write is that they still are using conventional analysis. He's probably more tied into the "why" things happen , actually he is, he has decades more experience, but we have an edge of seeing those things in action in the market way before technical analysis can act on it.
For instance, a new breakout high like yesterday, do you buy it? Most technicians would say yes, but we have the insight into the market that it's being sold by smart money so yesterday's breakout high, if you had bought it, would have left you with a loss. Just as the oil trade went down about two and a half weeks ago. A Bad report, the market sold off heavy, do you short it? Most technicians would say yes, there's cause and effect and no reason for oil to rally, but we saw the accumulation, bought at the lows and realized a quick gain as USO reversed up and we were able to buy near the lows. So I do respect his opinion, I just prefer our methodology and the things he's seeing in the market now like the Euro stress tests being a failure and the DB story you will read about, may have been the reason the smarties set up this bounce nearly two weeks ago now, they knew ahead of time and setting up a bounce would allow them to sell the bad news into strength. However, lets just get to the story and insights of a talented man....
Thanks again George and everyone else with their eyes and ears out there, when we all work together, we all benefit. And on that note, let me just remind you, for non-personal questions or comments, you may want to use the comments link so all can read them.
*It looks like our morning ascending wedge is about to break, although one final head fake higher isn't out of the question.
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