Whereas I'm usually able to change on a dime and sync my outlook to match the market action, I'm finding it hard to shake the 'going down' vibes.
It's no secret that my 'take' will often unfold with a delayed onset. So I'm sticking with it for now. If we continue to close flat/drift higher into Friday, then I'm wrong.
We were supposed to see some profit taking today after Monday's move, so today's market decline did not spook anyone. However, imagine the fear that people will get if the market drops 1% tomorrow? In that case, it will surely start looking as if the market is planning to re-test Friday's lows or even go below them. So the majority of market participants (who, probably, did not buy on Thursday/Friday but simply watched in disbelief the drop last week) will feel like this is their last chance to get out of here alive, and they will ALL head for the exits. So, if we see a 1% dip in the market tomorrow, then the easy trade would be to short the market big time and set a stop at Monday's lows.
ReplyDeleteSince I refuse to wake up early just for the sake of trading, I just set a buy stop limit order for 200 shares of TWM at $19.40/19.50. If that order gets executed tomorrow but by the time I wake up the market will turn green, I'll take a loss -- that's life.
David - I agree with this thinking. I turned on CNBC and everyone seems to think that we are now out of the correction and that the bailouts have solved all problems. Well, I highly doubt that these same people will be saying this if the market goes back down to 1,100.
ReplyDeleteWhat can take the market down?
Money printing all across the world has effectively revalued everyone's currency to the point where they are all going to be equal so in the long term it won't really do that much. Everyone will be left with debt that they never got rid of.
anyone see anything that's going on after hours? the market is off a crapload.
ReplyDeleteTook a bit of BGZ off the table at $14.1 in after hours.
ReplyDeleteExcellent, TOF! You stepped back from the market, analyzed it with a cool head, and got it right! At least enough to take some profits now.
ReplyDeleteI too took some aftermarket profits in Yamana, they were gianormous!
ReplyDeleteFutures are down, I feel "iffy" about the rest of the week.
Thanks David. It feels good to get a good chunk back after losing a bit last week. My sense tells me we're in store for some more downside and so do the charts. I'm expecting a drift down to the 1,120 to 1,130 level.
ReplyDeleteI put in a sell order for the remaining portion of my BGZ at $14.70.
The after hours decline in Russell 2000 futures stopped at the natural support level of 690, where they made a double top on Monday:
ReplyDeletehttp://quotes.ino.com/chart/?s=NYBOT_TFS.M10.E
If this support level holds for another hour or two, then we should expect an up day tomorrow.
What a nice technical picture we get in Russell 2000 futures: they bottomed out today exactly at Monday's lows and then rallied like hell once that technical support level held up. So TOF is probably right, and we should expect the same "technical" trading to emerge on the daily chart as well.
ReplyDeleteI was tempted to pick up 10,000 shares of TZA about 5 minutes ago. Thought about it hard. Didn't do it.
ReplyDeleteThat almost guarantees we gap down at least -100 points on the DJIA in the morning.
If I could somehow master the psychology of trading, I'd have it made.
ReplyDeleteWhen we 'can' pull the trigger, we tend to lose.
When we 'can't,' it often turns out to be the winning trade.
Some days, it seems as if whatEVER I do, I'm doomed to experience a pang of regret.
ReplyDelete(a) Entered at a good price? It will be even better in about 20 minutes.
(b) Exited at a decent profit? It would have been 3x that much if I had waited another 30 minutes.
(c) Stopped out countertrend? It will gap in my direction the next morning.
2nd - Most of my entries immediately move against me as well, so now I'm working on taking my gains before someone else does it for me.
ReplyDeleteI see even in the AH's, the ES moved down, then up 5 pts. Very shifty sands.
ReplyDeleteGold and U$D remain lip-locked.
ReplyDeleteThose of you who may be curious about the posters on Slope- you can catch a current Vegas photo of some of the regulars:
ReplyDeletehttp://www.slopeofhope.com/
How did half of them end up wearing the same shade of green?
ReplyDeleteWell, so far I can't say I regret NOT having picked up TZA after hours.
ReplyDeleteThe final perspective on that is at least ten hours away.
That would have been a serious over night play. I think TOF did the right thing by taking a little off when he did. Looking back at the tape compared to the ES at the time he got a premium.
ReplyDeletedid i sight a chicken pooKiere?
ReplyDeletevery welcome back my friend
CP- Earlier I thought you were commenting on the overall market, not just GMO. How do you see things now?
ReplyDelete2nd,
ReplyDeleteThe day you don't feel a pang of regret is the day your d!@& falls off:)
Actually, it would be the day after that, wouldn't it:)
Taking a few days off to smoke weed and go up into the woods and pray to the trees.
sharkie
ReplyDeleteyou can come to tahoe with me and get spiritual
god I can't wait, only 2 days
Well then. May the trees always bless me with pangs of regret.
ReplyDeleteMake that- May I be blessed with a few days off each year to commune with the trees.
ReplyDeleteI'm getting a feeling we're gonna see a big sell off again. The 300 point variety (for the J6Ps). For us oh so astute market observers, about 25 to 30 handles on the S&P.
ReplyDeleteMark - Last night everyone thought the market would sell off today and it didn't, really. What does everyone think tonight, it's going to sell off tomorrow?
ReplyDeleteThe majority usually gets hosed, right?
Anyway, my take is buyers will soon return so I'm looking for a re-entry.
vb - We're waiting for a Florida trip report, are customers lining up outside the door to become jr. slumlords? It's getting towards that time of year, I think...
CP- I think the market's going to sell off.
ReplyDeleteTomorrow.
ReplyDeleteAnd if it doesn't, I'm wrong.
ReplyDelete2nd, what are you talking?
ReplyDeletei know i belong in tahoe in the trees.
tahoe is all
Thank God I don't have 10,000 shares of TZA riding on that prediction ;)
ReplyDeletevb- What you need to do is work out a telecommuting option. This is 2010, for crying out loud. If some guy smoking a hookah in India can take care of my logon problems, you can close on a home sale in Orlando from Tahoe.
ReplyDeletecp,
ReplyDeletei talked to a client today who bought those 10 homes at under 100,000 and over 2500 sq feet. He already sold 9 at 140-150,000
for me, I am still waiting for the perfect op. of course that would be tahoe for under 100,000 and a 10 year job contract..
by for now
2nd,
ReplyDeleteI did that already
rothmancloseouts.com
i talked to a client today who bought those 10 kilos at under 100,000. He already sold 9 at 140-150,000.
ReplyDeletescary my contract is on google
ReplyDeletenothing is private anymore
https://www.techagreements.com/agreement-preview.aspx?num=465340&title=800america.com%20-%20Employment%20Agreement
i need rothmanfarout.com
ReplyDelete2nd - No offense, but when you say it's gonna sell off I hope you're right so I can buy back in.
ReplyDeleteIf it doesn't sell off, I hope to sell into a rally as opposed to just moving sideways.
Seriously though, I've got projects that need doing, like building a new hooptie barn and a deck outside the kitchen. I shouldn't be spending so much time micromanaging this thing, more like watching for major extreme entry points.
I still believe the economy is going through a healing process and this recent sell off will result in a rally lasting into August.
I've got some stink bids in, so sell, sell away!
2nd i tell you what,
ReplyDeleteelie rabie was the closest to truth I'll ever find. ditch the news and bs, I treasure every moment i spent with him. I miss him
and you don't have to delete this one.
Shanghai bouncing off 2600...
ReplyDeleteI believe you.
ReplyDeletehttp://www.rgm.com/articles/800America.html
vb - $100k for 2500sq ft? That's a steal if it's in decent condition!
ReplyDeletevb - aka Betty-Joe Farber, Nancy Marie Worthington, or Tillie Ruth Steeples?
ReplyDeleteWell, I don't think I would make that leap. My comment only refers to believing that Rabie had one hell of a handle on human nature.
ReplyDeleteWhat in the world are you guys talking about?
ReplyDeleteGreat idea vb:)
ReplyDeleteLet's get back to the Asian markets, which for the most part are in the midst of reversing yesterday's sell-off.
ReplyDeleteOne of the best takes I've read on last week's drop:
ReplyDeletehttp://finance.yahoo.com/banking-budgeting/article/109504/when-the-global-debt-shuffle-hits-home?mod=bb-budgeting
Since many "long" holders would bail once the market drops 1% from Monday's lows, the most frustrating outcome would be a 2% gap down tomorrow followed by a continual slide -- that would, once again, leave most of the people behind, not allowing bears an easy entry. But then, that's what the market did today: a gap down, except that it started rising after that, probably because many of the long holders did bail out at the open and many bears did jump it.
ReplyDeleteEspecially the final paragraph:
ReplyDelete"If you just want to fortify your portfolio, wait for an economic slowdown, when the people who have been barging into gold and commodities, emerging markets and inflation-protected bonds will come stampeding back out of them. Then you can buy at lower prices that will afford you some real protection. For most investors, at least for the time being, the best thing to do is wring your hands while sitting on them."
I see pre market futures are down pretty sizably. I'm putting in a sell order for 1/2 of my remaining BGZ, which is one of the biggest positions I have had on all year, at $14.65. I figure a sell off to the 1,120 to 1,130 level would be enough for at least a short term bounce and I don't want to stress myself out about my position size. I got in at what I believe to be a good price and I want my profits dammit.
ReplyDelete2nd,
ReplyDeleteOnly the paper gold will be for sale.
If you can carry it, you don't ave enough.
UXG chart looks like it is on steroids. I am pretty sure that it will drop back under $3 within the next 6 months. Hence, scaling out of my position now and placing gradual buy limit orders at lower prices seems like the right thing to do. I am placing sell limit orders $4.25 and $4.50 for 500 shares of UXG.
ReplyDeleteToday's mentality looks positive so far...
ReplyDeleteYeah, for once deciding against a last-minute bet on TZA paid off.
ReplyDeletewell, it looks like the bailout did indeed work. the markets are setting up for a February rally redux.
ReplyDeleteTZA @ 6.08...
ReplyDeleteIs this thing working?
ReplyDeleteOk. VB, see you Friday morning around 11. Just kidding:)
ReplyDelete2nd, I am sitting tight flat not in this market. Happy my AUY trade worked well and getting defensive.
I want to go golfing but it's raining, and my golfing in the rain days are behind me.
Important area here. Right at the top of the range for the last few days.
ReplyDeletealrighty well i hopped out of my BGZ at $13.61. Good timing because the market spike immediately after. I think we can forget about shorting this market.
ReplyDeleteDefinitely shaking down a few bears.
ReplyDeleteThat was fast. Now we have 1161 as support.
ReplyDeleteTZA- adding @ 5.93...
ReplyDeleteBidding TZA @ 5.88. S1
ReplyDeleteThis is kinda interesting...Take a look at AONE. Plenty of news today.
ReplyDeleteBid on TZA off. It bounced right off 5.88 but is heading back down. I don't like the second attempts.
ReplyDeleteAONE @ 9.42.
ReplyDeleteStarting to feel like a bull market again...
ReplyDeleteWell, have to hand it to you, CP. You made the correct call!
ReplyDeleteWhen I went to bed last night I was ready to open some shorts. Then I saw where all the yields had fallen to in EU.
ReplyDeleteSlow grind up or down now....??? Seems pretty solid right now. I'll stand pat.
ReplyDeleteWell crap, why was I so anxious to sell GMO yesterday???
ReplyDeleteOne of these days maybe I'll learn how to read this market...
Bidding on GMO @ $3.90, I can still hope for a test of support can't I???
Yep, economic recovery is back in full swing!
ReplyDeleteHas anyone got a bead on when the next hiccup might happen? Looks like the Greece deadline of ~5/15 debt repayment is water under the bridge.
Germans sure are a stubborn lot.
Standing aside for now...stocks I'm watching:
ReplyDeleteNLS (earnings after close)
ACMR (about to experience the heralded golden cross)
CTHR (this has been on my watch list for months now and I almost bought at $1.28. yeesh)
All of these are micro caps with good balance sheets and turnaround stories. As of yet I'm not confident enough to jump in the market because I have a feeling we might at least see a retest of the 1,130 level and I'd rather buy on weakness than strength.
Temasek and Hopu in US natural gas buy
ReplyDeleteBy Sundeep Tucker in Hong Kong and Sheila McNulty in Houston
Published: May 11 2010 05:57 | Last updated: May 11 2010 17:35
Two of Asia’s most active investment funds are to spend about $1bn to acquire a landmark stake in a leading US producer of natural gas from shale rock, following a series of other foreign investors into the sector.
Temasek, the Singapore state investment fund, and Hopu Investment Management, a Beijing-based firm, have agreed to buy $600m of convertible preferred stock in New York-listed Chesapeake Energy.
The funds have an additional 30-day option to acquire a further $500m of the stock, which they are “highly likely” to exercise alongside other investors, according to people familiar with the matter.
The Asian funds believe that the price for natural gas, trading at less than a third of the price of oil on an equivalent basis, is at a cyclical low point and that demand for the commodity will climb because of environmental reasons.
Gas is about 30 per cent less carbon intensive than oil and about 50 per cent less carbon intensive than coal. New drilling technology has also led to higher estimates for US gas reserves, up from 30 years’ worth, at current usage rates, to 100 years.
This has fuelled interest from energy companies worldwide. In recent years Chesapeake has done deals with Total of France, the UK’s BP and Norway’s StatoilHydro to help fund development. The deals have generally involved a 20 to 33 per cent stake in some of its licences.
World gas production
FT interactive graphic: The balance of power among the producers of natural gas has changed dramatically in the last few decades. Use this graphic to see the shifts
The latest investment was disclosed by Chesapeake as part of steps to raise up to $5bn over the next two years to reduce debt and attain an investment-grade rating.
The tie-up with Hopu, which also boasts an advisory arm, could help Chesapeake smooth a joint venture deal with a Chinese energy major such as CNOOC to develop gas projects in Sichuan province, said people familiar with the matter.
The convertible preferred stock carries a coupon of 5.75 per cent. The prospective $1.1bn investment would eventually translate into an equity holding in Chesapeake of about 7 per cent.
Chesapeake is either the number one or number two in the four biggest US shale fields: Haynesville, Marcellus, Barnett and Fayetteville.
Temasek acquired $500m in convertible preferred stock, with Hopu the remainder, said people familiar with the matter. Seatown, a new affiliate of Temasek, is likely to invest in a portion of the second tranche, alongside other Asian investors.
Temasek has been stepping up its investments in resources. Last November the fund invested C$310m in debentures issued by Toronto-listed Niko Resources, to help bankroll a deal connected to Indonesian offshore energy projects.
Hopu was set up in 2008 by former Goldman Sachs dealmakers and has made a series of high-profile investments – often alongside Temasek – in Chinese banks and food producers.
Chesapeake was last year stung by sharply lower commodity prices as a result of lower demand coupled with large supply increases after new reserves were discovered from unconventional shale-gas drilling in the US.
Chesapeake plans to sell up to a 20 per cent interest in subsidiary Chesapeake Appalachia, which includes its Marcellus shale operations, within the next three to 12 months.
The massive natural gas-rich rock formation, which sits beneath Pennsylvania, New York and other states, has attracted several big investors in recent months. Last month, Indian conglomerate Reliance Industries agreed to pay $1.7bn to Atlas Energy for a big stake in the field.
Environmentalists worry about the chemicals used in the shale rock process and potential contamination of ground water. The rock must be fractured with high-pressure water to release the gas, which has been absorbed in the rock, trapped in the pore spaces and confined in fractures.
Mark the above may be of interest to you with respect to CHK and HEK.
ReplyDeleteTOF - I'm having difficulty comprehending why a retest of 1,130 might be a possibility at this point but I sure would welcome the opportunity.
ReplyDeleteI'm standing aside now as well, wringing my hands and cussing myself under my breath while hoping we don't see 1,230 sometime Friday.... I don't see any barriers when global government is doing their very best to stimulate the economy. It currently looks like they've covered most of the bases... Unless of course they fail, which brings on unpleasant thoughts.
Maybe the thing to do is go short if/when 1,225~1,230 comes to us, the possibility of a breakout from there has a snowball's chance in hell... Unless of course you believe in miracles, which from my experience are few and far between.
Let the selling begin!
Chicken - I don't know...just from experience in looking at charts when the market was recovering from a big correction...We rarely see v-shaped recoveries off corrections that bring the averages down to the 200 DMA. And in each case where the correction came down to the 200 DMA and bounced, the index eventually went down below the 200 DMA within a month or two. However, the bounce last for a month to 2 months so my timing is off.
ReplyDeleteKeep in mind the sample size (i.e., only a handful of prior instances to refer to) of data is small so there is no guarantee it will happen again.
Okay, I'll go with that one, technical aspects fit well with the California story everyone seems to be bringing up.
ReplyDeleteThe fear (and risk) coefficient can only gain from here, that must be driving gold while steel seems to be stopped in it's tracks.
GMO has gotten a little too (or a lot maybe) giddy here...
CNAM - Sure did fly!
Is there a place where we can check the credit spreads on state debt?
ReplyDeleteOk, back in BGZ at $13.36 average.
ReplyDeleteGMO...It only seems too giddy....since you're not in it:)
ReplyDeleteAll right, I just sold at $18.02 the 100 shares of TWM I picked up at $18.62 yesterday. I want to have a chance to repurchase TWM at lower prices. I wanted to sell more TWM today, but then I figured that by now all the potential long players have realized that the train is leaving the station and today is their last chance to get aboard after this correction. So we may very well see a down day tomorrow, after which, however, the upward trend will probably resume. So I'll sell some TWM into the down day tomorrow.
ReplyDeleteTORONTO, ONTARIO--(Marketwire - May 10, 2010) - ECU Silver Mining Inc. (TSX:ECU - News), which holds a mineral resources of over 6 million gold equivalent ounces, is pleased to announce that it has reached a sales milestone of over US$2 million for the month of April.
ReplyDeleteThis is an important milestone for the Company as April sales have surpassed sales of all the previous months of operation. The trend in gold and silver sales for the Company continues to be positive and April sales are proving that the operational enhancements implemented earlier are beginning to have an impact on sales.
*******
I can't understand why ECU is moving up so slowly (but steadily) while the other explorers (like UXG) are making explosive moves up. Maybe it is collecting energy for such an explosive move up, which will take it up 50% in a day?
David - I still think the uptrend is broken. The markets are lulling people back to sleep before the next leg down, in my mind. Maximum frustration theory says close above 50 DMA today with a gap down tomorrow.
ReplyDeleteTOF, I do agree that tomorrow will probably be a down day, since most of the buyers will "hop on the train" today. Will that be the end of the rebound? I am not sure anymore. Liquidity injections can do wonders to the markets. Even Bill mentioned at some point that all the bearish-looking charts have been resolved to the upside so far "due to massive stimulation by interventionists." What makes you think that liquidity won't trump the usual behavior around the 200-day MA this time as well?
ReplyDeleteDavid - I think the fears surrounding the shakeout from last week keep longs close to the sell button, which makes the odds of a secondary correction all the more possible. I think that's why historically you pretty much always see a crash, rebound, then another dip. It almost always happens. The collective pscyhe of buyers is fragile and it takes time to build confidence.
ReplyDeleteAdd to this technicals...the number of people watching the 50 DMA is quite high. We have had 3 attempts to break it so far with no success. At some point people just give up and say it won't be broken...and then they sell. That selling fuels more selling by the late to the party longs that are standing right next to their sell buttons. And the most dangerous set up in my mind is the one where it breaks, people pile on, and then it gaps down below the break level, trapping new longs and the longs sitting by their sell buttons. That's what I think is happening right now and is why I'm long BGZ.
ReplyDeleteAll right, I'll reload my TWM shares at EOD. :)
ReplyDeleteDavid - Please don't trade based on what I'm saying...just something to consider. I agree that there are big difficulties with shorting this market with so much crap being thrown at it.
ReplyDeleteMy position in BGZ is not that big as I'm more in a wait and see mode. I did buy some ACMR today at $3.47 as a hedge and might add a little NLS and CTHR...
TOF- I have SPY just a hair above the 50. What do you have?
ReplyDeleteI have the ES 2pt.s above R1. R2 is 1182.5
ReplyDeleteDitto for SPY. Just above R1. R2 118.53.
ReplyDeleteTOF: I already mentioned a couple of times today that I see good reasons for the market to be down tomorrow, so if I buy any TWM at the close today, I'll sell it tomorrow. This will be a trade "a la 2nd_ave", when he does something that goes completely against the market mood. Today everyone is DEFINITELY convinced that the correction is over and the market is going higher.
ReplyDeleteKyle/TOF- This might be interesting to your line of thinking.
ReplyDeletehttp://www.youtube.com/watch?v=DRI5Id9vz6U
David - right...that's my thinking too I guess. I think there is a lot of skepticism too though. Hard to tell for sure what people are thinking as a whole but I'm trying to hypothesize what the market is feeling.
ReplyDeleteMark - I have the 50 DMA on S&P 500 as 1,173.49.
I guess the consensus is 1173 for the 50, cash.
ReplyDeleteES right on R1.
ReplyDeleteGood day for FTWR. Back above 5.
ReplyDeletelong TZA at 5.64
ReplyDeleteSorry I didn't mention I moved my entire IRA into SY at the open :)
ReplyDeleteGo get em Cheapy!!
ReplyDeleteCome on JB...this is your specialty.
I just bought 200 shares of TWM at $17.78 (100 shares to replace the ones I sold earlier today at $18.02 and 100 more shares to play on tomorrow's down day). I placed a sell limit order at $18.78 for these 200 shares.
ReplyDeleteAll right. ES held R1.
ReplyDeleteIt is also interesting to note that S&P made 3 lower highs at the end of April before collapsing, and if one connects those 3 tops with a declining line, then today's close just touches that line. So technicians could say that S&P has reached its overhead resistance. But we know that all such observations are crap, don't we? :)
ReplyDeleteCSCO has 40B in cash...damn.
ReplyDeleteCatch you cats at happy hour.
ReplyDeletedumped TZA AH at 5.66
ReplyDeleteno need to take risk when I am green
ReplyDeleteI am placing a sell limit order at $7.32 for the 250 shares of SD I picked up last week at $6.32 (1/4 of my total position).
ReplyDeleteSomething bad must have come out of the CSCO conference call b/c the stock tanked. Maybe Europe weakness???
ReplyDeleteoh well, shoulda woulda coulda...
ReplyDeleteIt's been happy hour here since around 3 pm:)
ReplyDeleteI am also setting a buy limit order at $3.50 for 500 shares of UXG I sold today at $4.25 (when the limit order I set yesterday was hit).
ReplyDeleteshows what i know, i thought we'd buy tdc.
ReplyDeleteShark - GMO was too damn giddy for me yesterday, I think. It's either going to break out or loose steam and I don't see a reason for a breakout aside maybe from Greece holding it back.
ReplyDeleteUNH was a real rocket ship today as usual!
NEW POST
ReplyDelete