Friday, August 27, 2010
8/28/10 Break On Through
Yeah I know it's not Jim Morrison, but I wanted to hear the song played with a real bass.
I'm high on Nadurra right now, but even higher on notching my largest one-day gain for the year since Some Kind of Wonderful last May.
Earlier this afternoon, I caught the following Chronicle review:
http://www.sfgate.com/cgi-bin/blogs/hamblogger/detail?entry_id=71012
Which led me to Mollie Stone's after work, where they were offering ground Wagyu beef @ 6.99/lb. Looking forward to a 1/2 pound burger cooked medium rare.
Do we continue up Monday? I don't know, but with expectations high for resistance at 1170-1180, I would say we break right through it.
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The economy stinks, but the market was oversold and we are at end of the month pension/retirement fund inputs, so I think you could possibly see 2 or even 3 up days unless something else comes up snake eyes.
ReplyDeleteOdd that rates went up today with the economic outlook so gloomy. If the bond vigilantes come to town, you better not be out there on the street, IMO.
MCP - This recent IPO was fairly hot again today.
ReplyDeletecheapy - We might call this one the WTF!(Wednesday, Thursday, Friday) rally.
ReplyDeleteThe fact that the market went up in spite of how lousy literally all news is lately tells me its overshorted, but to be honest, the future is so bleak that I don't see anything but bounces to resistance and reshorting. They will keep probing, and eventually the market will collapse as bulls get more and more discouraged.
ReplyDeleteThe only out I see possible to the upside is the tax cuts being made permanent, but if that happens its bad trouble for the dollar.
Intel - So I wonder if perhaps more traders love Intel now following yesterday's "Friday fiasco fest"?
ReplyDeleteYou need to be willing to wait 2 yrs for them to go back to growing profits, IMO. If you can take the wait, and don't think the world around them will collapse in the meantime, the opportunity is there.
ReplyDeleteNo expert here. I once was in the field, but am dated now, and have no clue if Intel is still the company I once respected so much. Recent moves ala takeover say no, but maybe there is something not apparent to me there. The problem I see is that they are saying they have no organic growth left, and are resorting to buying things that won't even add to profits, just to make it look like they are still growing.
2nd - Ran some scans for mutual funds (Fidelity & Vanguard) that are near the 52-wk low. Believe you have a good pick in FSRBX and I'm going to follow you into that one. Already have FSENX, FSPTX & VGHCX in 401k.
ReplyDeletehttp://finance.yahoo.com/q/hl?s=fsrbx
It does demonstrate Cramer's complaint re. mutual funds from the very start of his show..
"With mutual funds you get the bad with the good and I believe I can pick the good." Take FBIOX for example...
http://finance.yahoo.com/q/hl?s=fbiox
The wrong % allocation by the fund manager and you're screwed...
INTC - I believe WDC may have heard Otellini's "dismal collection of perceptions" regarding the U.S. economy during Monday's Aspen technology conference, I think I caught wind of a renewed interest in WDC to revisit or step-up efforts by Congress on the subject.
ReplyDeleteIt'll be interesting to watch and see if this one gains traction and something comes of it.
Maybe Intel isn't so bad after all...
cheapy - Agree with you re INTC. I worked for IBM (Federal Systems) 83-94 and it is possible for these companies to blow-up. Lou Gerstner's book "Who Says Elephants can't Dance?" is a great read. [p.66 "Only a handful of people understand how precariously close IBM came to running out of cash in 1993."]
ReplyDeleteI wouldn't worry too much about Intel's recent acquisition, I'm confident their business decisions are well planned.
ReplyDeletecp - There was a bearish trade on INTC suggested Fri evening on the cnbc 'Options Action' pgm. A Ratio (1x2) Put Spread: Buy 1 Jan 17.5 put and Sell 2 Jan 15 puts against it. I'm still mulling it over. As one of the trader's remarked, it's often unwise to go into Sept & Oct being short puts!!!!!
ReplyDeleteI wouldn't worry too much about Intel's recent acquisition, I'm confident their business decisions are well planned.
ReplyDeletecp, its not that i worry about them running out of cash, its just that they gave no good reason for buying it, and it won't add to profits for years. I just think the money could have been better spent, and they basically wasted their reputation with shareholders on it, and it will be a long time for the stock to recover because potential share buyers will no longer trust their judgement.
ReplyDeleteKyle - I don't watch any FETV, so I wouldn't have caught something like that.
ReplyDeleteSeems to me INTC should be priced around $20.
Man, I'm getting quite a few errors from my internet provider today...
Kyle - I don't watch any FETV, so I wouldn't have caught something like that.
ReplyDeleteSeems to me INTC should be priced around $20.
Man, I'm getting quite a few errors from my internet provider today...
I wouldn't worry too much about Intel's recent acquisition, I'm confident their business decisions are well planned.
ReplyDeletecheapy - I have an impression something's going on in the background but perhaps your right.
ReplyDeleteYou guys should have a much better idea of the true circumstances than I, considering you have better access to more resources.
GRMN - I'm beginning to think I shouldn't have sold this one but I don't regret it too much since I'm plenty long right here anyway.
ReplyDeleteIMO, Intel isn't growing, and in order to be a "growth stock", they need to be, so they are adding revenue stream, even if it means no additional profit, and longer term are hoping they can use their position to make more out of it somehow...
ReplyDeleteIBM... I have mixed feelings abut them. I worked progamming their systems for 25+ years,, and watched them go from the leader in hardware to an outsourcer for software development, and to be honest, I liked the IBM of old a lot better. They screwed up the PC thing, and screwed up the OS/2 thing, and never did recover in my mind. They keep making money, but it seems to me its on their reputation of old, and I wonder how long it lasts.
ReplyDeletecheapy - Agree. Went to work there toward end of 83 & I sent in the 'punch card' saying I wanted to have deductions from my paycheck to buy the stock. They sent it back saying I had to work there for 6 months before I was eligible for ESOP. After 2 months I was like 'you know this place is Jacked Up and I really don't want any of your stock'. First impressions are usually the right ones....
ReplyDeleteIn the 80's IBM really had great people in the field, IMO. But they got crazy cutting costs to where they didn't have those good people left, and wanted more money all the time for less in help or hardware. As time went by through the 90's this got much worse to where ALL the CE's and SE's were gone, and they were just a sales organiztion, selling hardware or software services or wierd ideas that got outsourced. They still make the machines I worked on but pretend they are servers now. Times change, I guess, and to be honest, I guess they have done well to make it through all those goofs and still be in business and still be making money, but they could have been so much more. HP was always crap compared to IBM in my mind, now look at things...
ReplyDeletecheapy - Agree again. I was out in FSD Manassas working on sonar signal processing & all they wanted to do was cram as much high-priced HW down the Navy's throat as possible. While a few years' later, you could get fairly capable DSP audio frequency boards at Radio Shack for a few bucks & SUN Sparc Workstations instead of the VERY high priced racks that IBM was trying to sell.
ReplyDelete...maybe Radio Shack is a stretch, but Mercury & SKY had them...
ReplyDeleteSMH and XLF are looking pretty decent here too.
ReplyDeleteGS - Has anyone any ideas on what's going on there? Head-fake maybe?
Seems like if HB&B would simply bid the market up from here then human sentiment might change to the positive and global corporate profits begin to rise which then might lead to a jobs recovery.
ReplyDeleteSeems simple, doesn't it? I guess the devil's in the details.
certain sub sectors of tech are now mature markets, and I don't think of the them as growth business, rather I think of them more along the lines of a P&G, or GE.
ReplyDeleteGVP - jb, have you ever heard of this s/w company?
ReplyDelete"largest one-day gain for the year" -- that's great, 2nd_ave! Well worth being high on Nadurra. :)
ReplyDeleteThe absense of growth in INTC is well-known -- that's why its PE is 10 now rather than 30. But the absense of the *need* for growth in expectations for INTC implies the extreme stability of their earnings, which in turn implies that every significant drop in the stock price should be bought, since it will inevitably rebound. It is much more dangerous to buy significant drops in growth stocks, since maybe that drop is due to the smart money sniffing out the end of growth, which can bring the PE from 30 to 10 and the price down by 60% ultimately.
ReplyDeleteDitto on David's comment, that's great news 2nd!
ReplyDeletevb- Here's a job worth applying for:
ReplyDeletehttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/08/28/MNGO1EVUIQ.DTL
All you need is to find out how to get licensed for commercial boating, which can't be that hard (note that new college grads have held the position):
"If it all sounds romantic, there are some "important caveats: Applicants must have a U.S. Coast Guard commercial boating license, eschew pizza delivery and enjoy the company of, well, seagulls. They must also relish hard work. Four days out of the week, the three-story Victorian bed and breakfast hosts up to five couples who pay from $295 to $415 a night for a gourmet breakfast, four-course dinner and ferry service to and from the island.
"The innkeepers must keep track of the business' paperwork, make weekly trips ashore for groceries and other supplies and ensure that the foghorn and flashing Fresnel light in the 1874 lighthouse are working. They're paid a total of from $60,000 to $100,000 a year.
"It's a fantastic experience and most people wouldn't trade it for anything. But usually they can only do it for so long and then they move on," said Tom Butt, president of the East Brother Light Station board, the outfit that manages the Coast Guard-owned island.
"In the three decades since the volunteer board took over the island's upkeep and opened the bed and breakfast, people from a variety of backgrounds have taken up residence in the small one-bedroom innkeepers' cottage.
"Some were just out of college, others middle-aged. Babies have been born; couples split up. One common denominator is the length of stay.
"While one stint ended after only eight months and another lasted five years, most innkeepers stay two or three years."
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/08/28/MNGO1EVUIQ.DTL#ixzz0xvZR6a3L
vb would certainly test her resistance to claustrophobia, I think of her as a world traveler.
ReplyDeleteGourmet meals? Sounds like a very good job for the right kind of person, close enough to living on your own island but hardly out in the middle of nowhere. Heck, even I don't necessarily go grocery shopping on a weekly basis. I'll bet there's a long line of folks knocking on that door.
SD - Wow, 27% loss in 22 days, looks like the earnings report involved some degree of disappointment. Sheesh, when does the selling stop?
ReplyDeleteNow on bottom of a lower trend line but that wouldn't buy a cup of coffee at this point would it?
DAvid/CP- Actually, Friday was my largest one-day gain SINCE the one in May (when I last moved the buy-and-hold into a combination of sector funds). It came out to about 1.3% of the port.
ReplyDeleteRe: bullish sentiment at 21%
ReplyDeleteSubmitted by cheapy (352 comments) on Sat, 08/28/2010 - 15:31 #68044 (in reply to #68041)
Yes, I too read that bullish sentiment is very low, but what I don't understand is that we haven't seen any mutual fund redemptions, like what usually occur when the last of retail finally give up and sell. I recall the panic of redemption exits causing the last of the 87 crash.
My mom is still stubbornly long, admittedly a bunch having been pulled off into a ladder of 1 yr CD's paying 3 to 4%, but it seems to me that there is usually some sort of retail exit panic at the bottom when they finally dump their mutual funds. I also recall in the past the tax loss selling if the market is down off highs, and that is why September has historically been a bad month, partly because of that, I think. Even though the 87 crash was in Oct, Oct is typically a good month, maybe because it follows Sept, after everyone has bailed out.
I wonder what sentiment looked like before the other crashes and major declines unfolded. I also wonder what happens to stocks if bond interest rates begin to rise. I heard recently the the CDS on US debt are getting a lot more expensive. IMO, at some point soon that should begin to affect rates.
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Re: bullish sentiment at 21% newSubmitted by 2nd_ave (4506 comments) on Sat, 08/28/2010 - 15:57 #68045 (in reply to #68044)
My reply to that would be that we are not even close to the ultimate bottom, rather a tradeable bottom that will eventually be taken out- maybe even within days/weeks.
I think in "nominal terms" that the bottom could be anywhere, completely determined by Ben and the boys deciding how much more debt to print, and therefore how much the dollar is eventually devalued by.
ReplyDeleteA lot of the problem, as i see it, is that everything we trade is measured in those "nominal terms".
Here is a nice article by John Mauldin about what we should expect from the stock market for the next 10-20 years:
ReplyDeletehttp://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2010/08/27/the-dark-side-of-deficits.aspx
I have a 1 day subscription to the fullness of stopsandtargets.com including their TA of most individual stocks and ETF's. I am busy trying to get as much as I can but if you have a request or two I will try to oblige.
ReplyDeleteAs an example of what I can transmit: INTC is rated a Bear 5 of 10, the second stage of a long term bear market. Stop is 18.45 at which time it will flip to a counter trend buy. (This may be a bad example since it was so volatile lately.)
Interesting facts that stand out in the overall picture called the Matrix: OVER 60% of stocks are bearish in their primary trend as of Friday. However, if you include the number of counter trend pop-up buys on Friday the number goes even for the shorter term.
Don't even ask about SD. It's deep into Bear 10 with a stop @ 4.64.
illini- Since you're taking requests:
ReplyDeleteAMAT
CSCO
BAC
WFC
XOM
And if they rate mutual funds:
FSRBX
FSELX
FSENX
In place of the above mutual funds:
ReplyDeleteXLF
SMH
XLE
No MF, just ETF's.
ReplyDeleteAMAT @ 10.69 is bear 10 and wont flip until 11.80 LT & IT, 10.72 ST (latter least reliable). Target down is 10.5 so no good gain to risk ratios.
XLE Bear 10 Stops st 54.88, lt 53.69, it 52.95 indicating a compressio of EMA's?
ReplyDeleteXOM @ 59.80 Bear 10 Stops st 56.65 lt 60.76 it 59.89
smh 25.31 bear 5 2nd stage of a long term trending bear. Its all TA. Bottom spotter on Fri @ 24.38 may indicate an important event. Must be confirmed with a close above 25.43, the signal bar high. 25.68 is flip point for this bear level to ?.
ReplyDeleteBAC @ 12.64 is bear 10 but bottom spotter appeared @ 12.41. There were an unusual number of Bottom spotters on Friday per the matrix. Something might be up. Stop for bear 10 is 13.25-14.45, st to lt.
ReplyDeleteWFC @ 24.00 is Bear 10. Only a top spotter still in place @ 34.25 on APR 21. Fri saw a support hold @ 23.47 generating a buy to cover short partials signal. Counter trend bounce currently in progress. IT stop is @ 24.88 for another cover short partials, I guess.
ReplyDeleteSo you're saying that stopsandtargets tends to confirm my take on a ST bottom?
ReplyDeleteOK, I've been off the blog for a bit with a technical but lets see if this goes thru. 2nd, I sent e-mail about my problem to you.
ReplyDeleteAlso, I may be hitting the sack soon.
CSCO @ 20.81 is Bear 10. However, bottom spotter today @ 20.36. Counter trend ST buy @ 20.73 FRI for those interested in counter trend. Tgt would be 21.13 short term.
ReplyDeleteYes, there are many bottom spotters on Friday. That is unusual, I think. Might indicate a ST bounce.
ReplyDeleteThe average 3-day volume in UNG is the highest it has been since early June, which suggests that we are getting close to capitulation in NG. Maybe we have seen it already this week. After all, most of the smart traders have probably realized that this year is going to be a repeat of the last year, and so it pays to sell their UNG in August and then to start scaling in right after the Labor Day (last year, the UNG rally started right after the Labor Day). Since no one wanted to be the last stupid guy selling before the rally, I would bet that most (if not all) of the selling has already been done, and so UNG has a high probability of rallying next week, one week earlier than last year. Let's see if this prediction works out. :)
ReplyDeleteIf it doesn't, then I'll increase my position in HNU.TO from 4000 to 5000 shares if UNG hits $6, and then I'll place a buy limit order at $1 for $5K worth of January $5 UNG calls (which are selling now for $1.48), which I will then try to sell at $2 so as to double those $5K. If UNG keeps going down, then I'll place a buy limit order for another $5K worth of January $5 calls at $0.5, which I will then sell at $1. So I am prepared to keep "doubling down" in UNG via call options until UNG hits THE bottom of its current drop.
CP - I haven't heard of GVP, although sim s/w for the power industry is an interesting niche.
ReplyDelete2nd - great job on the trades this week!
Hi Guys- Man this has been a long 4 day weekend....:). Appraisal is tomorrow morning. Hope to have everything done by then. 11 Fing years of working on this money pit and we're finally putting up some lights and pictures on the walls.
ReplyDeleteMiss hanging out with you guys. Back to work, the clock is ticking....
PS. If my marriage survives one more day we should be good for another 10 years.
BTW- Could someone explain to me the ratings of the stocks Illini is using. I don't understand the parameters.
ReplyDelete