Saturday, November 21, 2015

11/21/15 The BAML Put

The late September Alibaba Put was good for a +10% rally in emerging markets indexes.  The latest BofA Merrill Lynch Fund Survey provides another sentiment indicator that may send Emerging Markets + commodities higher in December.

The above news release notes that 'aggressive underweights on commodities and Global Emerging Markets are maintained.'  Cobbling together pieces of the actual report from the blogosphere, it looks as if current allocations to Emerging Markets (at -31% underweight) are at levels comparable to early 2014.  I recall watching a panic selloff in EEM during a spring break flight from SFO to Vancouver in March 2014 (subsequent to a relentless decline the previous December/January) that sparked a 6-month rally in the sector.

Other (non-contrarian) 'positives' in the above report:

(a) 80% of panelists expect a rate increase in December.  Thus an actual hike is likely priced in.
(b) 'Concerns over a slowdown in China [have abated].'  This tells me that the 'fog of fear' has lifted from the EM landscape.  We will still see declines, but they're less likely to be tinged with panic.

Friday, November 20, 2015

11/20/15 Zero Hour


It's 9 am somewhere.

DJIA at a full gallop out of the gate-> +122 points.  EEM (emerging markets) +1.27%, EWZ (Brazil) +1.75%, FXI (China 'H' Shares) +1.68%.

Thursday, November 12, 2015

Running for the Sun....

CP- ENPH could be in real trouble. Market cap now is basically the same as a quarters worth of earnings. No 401K money can touch them and only one firm has a decent buy rating. I'd ask my buddy but he's probably really hurting here. I know he also had a good chunk of SUNE and FSLR. ...25M in cash. I bet they can break even with projected earnings of 70M. SEDG market share was mostly SUNE, SCTY, VSLR..bascially all the leasing plays that all say they are going to cash generation mode. I also suspect the ITC going away next year is getting priced in right now. I suspect it will remain in some form for private buyers are certainly with storage systems. That's ENPH take at least. Lots of talk about SUNE dropping it's bid to buy VSLR. Vey interesting and obviously damgerous sector.

Tuesday, November 3, 2015

11/3/15 The Overseas La-Z-Boy

This one’s made in China! 

Since exiting Emerging Markets on October 28, the sector has declined and rallied back:

(a)    The quick turnaround tells me we’ve probably seen selling exhaustion.  Bulls are in control.
(b)   Oil prices + energy stocks appear to have printed a major bottom.  Emerging markets are closely correlated with both.
(c)    US indexes appear headed to new highs(!), adding to the tailwind for higher-risk assets.

Brazil and South Korea seem overextended here, so my strategy will be to focus on China.

(a)    Reopened CAF (China ‘A’ Shares) @ 24.90, exactly where I closed the position last Wednesday.
(b)   Opening a position in FXI (China ‘H’ Shares) @ 38.76, last Wednesday’s closing price.
(c)    Will reopen a position in VEIEX (Vanguard Emerging Markets) at the close.  Advantages of VEIEX over FEMKX (Fidelity Emerging Markets) are a relatively low exposure to Brazil (6.84%) + zero exposure to South Korea.  I last exited VEIEX October 28 @ 22.58.  The fund closed last night @ 22.40, and based on today’s move in VWO/EEM I hope to reestablish a position within a percentage point of 22.58.

Based purely on the unrelenting rally in US stocks, I suspect it will be difficult to time entries into any year-end rally.  With that in mind, I’m opting for a ‘La-Z-Boy’ approach through early 2016.

11/3/15 Comment Cleaner

Friday, October 23, 2015

Wednesday, October 21, 2015