Thursday, August 5, 2010
8/5/10 Landslide
I took my love, I took it down
Climbed a mountain and I turned around
And I saw my reflection in the snow covered hills
'til the landslide brought me down
Congratulations to CI and David! Is it possible to continue higher with no drawdowns? I don't know. Personally, each time I've hit a significant new peak it paid off/would have paid off to take a breather.
I've heard references in the 'post-close' to 'impulse moves,' up or down. Not sure where the term comes from, but I can imagine the moves being similar to electrochemical impulses traveling down human nerves. Which may in fact be exactly how these moves originate.
In any case, I've found that (almost) without exception, each of the the 'ultras' displays at least one impulse move each day. And if I sit quietly in the shadows waiting for one to unfold, I am able to capture a (relatively) low-risk gain.
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CP: I didn't know about the move in the grains until someone here pointed out a move in JJG. The reason I bought heavily MON at $50 is because its forward P/E was like 15 at that point, and with a steady annual 15% growth in earnings predicted by the management (as a part of their "slow but sure" strategy as opposed to the original strategy of doubling earnings by 2012) the stock looked like a bargain to me. Also, MON has plateaued at $50 for a while, so it seemed like the selling has subsided. However, when I bought it at $50, it quickly broke through its support and then had a large down day, falling to $45. That large move down was reversed the next day with a large move up (from its multi-year low), and I posted here that we have most likely witnessed a capitulation in MON...
ReplyDeleteCanadian Investor: just like 2nd_ave said, there were several points since I started trading 4 years ago when my accounts were up a lot over the previous month and I was happy with my account balance. Every time, a thought has crossed my mind about selling everything and preserving the gain for some time. I never followed that "call," and every time, in a short order, my account balance has dropped significantly as all the previous trends got reversed. So if you are happy with your account balance now, I suggest that you bail out and wait until something you like for the long term becomes so oversold that you just can't wait to get in. Then wait some more and get in. :)
ReplyDeleteThanks 2nd, but the greater credit goes to David, cheapybob, sharkie, CP and yourself for letting me know what train you are taking. I am just coming along for the ride when I think it looks like something I would enjoy.
ReplyDeleteImpulse moves are exactly what I look for to initiate a swing trade. Once I see the bulls are buying I forget about debating them and just follow and at the same time knowing how much pain I can take. When you are up the pain is much less when you give it up. It is worst when you did a hole and keep digging deeper.
Anyways, I am just listening for the others here to say they are out and I will sell with happy thoughts.
I am having a couple of cheap beers with lemon now to cool off and stop thinking why those stocks went up so much. It is still too much too soon and that has me a bit worried.
Just a thought: my gains would be even larger if the Cdn $ did not gain on the sinking US $. If they get to parity, I think I will join you folks and start buying US stocks for a change.
ReplyDeleteI think if you are at all time highs its a good time to lock in some of the gains. There will always be panics to buy somewhere if you are a little patient.
ReplyDeleteThat IS why I'm out, too.
I have no clue what tomorrow brings, but I'd say its the turning point...
It's difficult for me to believe we're hanging out above the 200DMA, maybe the selloff was overdone?
ReplyDeleteand Mark, TOF, vb, e5 and all. Just finished my next beer and lemon.
ReplyDeleteOkay, I am taking your advices into consideration. Maybe for now I will sell half, tomorrow is another day and now is happy hour.
Just opened one myself CI. Great job man! I wont chime in one your wonderful dilemma. I tend to sell to quickly.
ReplyDelete2nd- Just left a message with my local RE gal. If I get the all clear on the value of my home, the paper work goes in that day. Thanks for keeping me up to date.
CI - I was this close to selling everything in late April/early May and just sitting on my gains. I was up about 40% or so for the year. Now I'm sitting on about 8 or 10% gains. Lesson learned. Hope you take advantage of this opportunity to do the same, unless you have a sure idea of where the market is headed and are ok with your positions.
ReplyDeleteGL either way. I'm personally double short gold and in cash. I'm doubting my short gold position right now because any further draw down in the markets will bring in the we need more stimulus calls. I doubt that will happen but I can't put it past politicians. Today's rumor about the whole Fannie/Freddie thing is just what the gold bulls needed.
NLY - Something hit it hard all of a sudden today.
ReplyDeleteTOF- Rumor about the Zombies? (Freddie/Fannie). You've seen the movies..you can't kill a Zombie ;)...What was it?
ReplyDeleteNLY- Crazy put volume across all strikes....
ReplyDeletehttp://www.screencast.com/t/ZjA1NTY2NG
Judging by the NLY chart, it almost looks like "Obama's August surprise" wasn't exactly a surprise to a few folks... Insiders/HB&B Clients?
ReplyDeleteI really don't want to investigate this one, I'm all outta investigative fortitude tonight.
TOF- WOW....God I hope that's not true. Thanks.
ReplyDeleteTOF,
ReplyDeleteI think gold really needs to get hammered tomorrow, or your trade is going to be in trouble.
The thing I can't figure out is whether its a weak or strong employment number that is good for gold here. Maybe it doesn't matter, because nobody is long gold currently.
CB- My thinking on DZZ also. If it doesn't break tomorrow, I'm out...for a small profit hopefully.
ReplyDeleteI think gold has every reason to fly, we're getting much closer to our government having to dilute note holders.
ReplyDeleteAn improving employment number should relieve some of the pressure to print, I would think. WDC already knows the answer, we can be sure.
ReplyDeleteThompson Creek moly producer (TC) was flying AH with their earnings report, should be good for GMO maybe...
ReplyDeleteGulf news...
ReplyDelete6:42 ET
Aug 5 (Reuters) - Here are some developments in BP Plc's Gulf of Mexico oil spill, the largest offshore oil disaster in U.S.
history.
TOP DEVELOPMENTS
* BP pumped cement down its blown-out Gulf of Mexico well on Thursday, sealing it off and setting up a planned permanent
kill later this month of the source of the world's worst marine spill.
MARKET IMPACT/COMPANIES
* Independent oil and gas company Plains Exploration & Production Co plans to sell its assets in the Gulf of Mexico and
expand onshore, due to the regulatory backlash over the BP oil spill.
* Transocean Ltd reassured investors on Thursday that BP would bear most of the liability linked to the Gulf of Mexico well
blow-out and resulting oil spill disaster.
* A group of investors including the two largest U.S. public pension funds asked 27 top oil and gas companies on Thursday
to disclose what they have done to make their offshore drilling safer in the wake of the BP oil spill.
* Reflecting hopes that an end to the 108-day-old drama is now in sight, BP shares hit two-month highs in early trading in
London. They later fell back, closing up 0.42 percent. BP shares closed up 3.3 percent in New York.
POLITICS/POLICY
* Mexico's state oil company Pemex will delay its Maximino exploration oil well until next year due to concerns about
deepwater drilling in the wake of the BP Plc oil spill, a top regulator said on Thursday.
* The White House said on Wednesday it owed no apology to former BP chief executive Tony Hayward, after welcoming a
report that showed pollution from the Gulf oil spill was less than many initially had feared.
CAPTURE/CONTAINMENT/CLEANUP
* Most of the oil spilled in the Gulf of Mexico has evaporated, sunk to the seabottom or been collected and disposed of, the
U.S. government said on Wednesday, but some could end up in U.S. drivers' gas tanks.
* Nearly three-fourths of oil from the BP spill is gone from the Gulf of Mexico, with 26 percent remaining as a sheen or
tarballs, buried in sediment or washed ashore, U.S. scientists said on Wednesday.
ENVIRONMENT
* With most of a once-massive Gulf of Mexico oil slick no longer a threat, environmental experts say the Gulf coast may
have dodged the worst nightmare of a massive catastrophe.
* Gulf of Mexico shrimpers and fishermen, whose livelihoods have been imperiled by the BP oil spill, can go back to work as
soon as tests show there is no risk of contamination, a top U.S. official said on Wednesday.
Considering the turmoil and supposed bashing, big oil sure does turn some incredible profits...
ReplyDeleteChina's green at the moment, hope it stays that way...
ReplyDeleteTZA jumped from a pre-market bid/ask of 30.55 to 32.23/32.25...
ReplyDeleteNo positions.
Mark- I think we hit 4.5% today.
ReplyDeleteTLT is kicking ass.
ReplyDelete2nd- I was thinking the exact same thing.
ReplyDeleteI guess if one tried to find a silver lining, gov. jobs purging, private rising.
IMO, DZZ will be even uglier because it lacks liquidity. I've looked at it before when I thought gold was too high, and came to the conclusion that if I went into it, I wouldn't be able to get out at a reasonable spread if things went sour.
ReplyDeleteLandry-
ReplyDeleteRandom Thoughts:
As I've been saying (see the chart show) the volatility has compressed in the indices. This action suggests that we were due for an expansion in volatility.
Well, it looks like we'll get that sooner rather than later---the futures are getting whacked pre-market.
Obviously, this will keep indices stuck in a range.
X/AA/XLB catching a bid off the bottom.
ReplyDeleteTZA @ 31.33...
ReplyDeleteArghhh - SOrry for leading you into the fire, Mark. GLD is doing the old moon shot because of expectations of add'l stimulus. I still say there's no shot in hell of that happening, for political reasons, but what do I know. I'll be forced to stop out at a close of around 118.4 or perhaps an intraday high above 119.10.
ReplyDeleteStopped out 31.30... Man, nothing can sell this market off.
ReplyDeleteWell, Shanghai closed very green.
ReplyDeleteMarket can't drop because they are printing money/credit like madmen to avoid deflation, keep housing, asset, market, wages and tax revenues up.
ReplyDeleteWe are witnessing mass malinvestment to desperately seek yield or gains, IMO.
Where to hide is the name of the game...
TOF- No problem man, I liked it. I;m green here on the day anyway, so I'll give it a little more room than I might normally.
ReplyDeleteIf we don't give our honest opinions we are wasting our time.
WTIC goes green.
ReplyDeleteYou want an honest opinion??? Who the hell is bidding up HEK before the weekend with earnings ofter the close Mon?
ReplyDeleteNothing happening in the VIX.
ReplyDeleteI don't know who is buying HEK, but I can tell you who is selling - ME! cutting my position by 25%
ReplyDeleteBonds have not weakened appreciably this morning, which may be the real tell.
ReplyDeleteAll right, I give...DZZ off @ 11.24.
ReplyDeleteI'll revisit shorting gold at a test of the 50dma.
ReplyDeleteWhat's worse- getting Tased out of TZA @ 31.30, or being a fully-invested fund manager wondering if today is the beginning of the end?
ReplyDeleteTLT- Go Baby Go!
ReplyDeleteVIX is creeping up...
ReplyDeleteCreeping might be to weak a term :)
ReplyDeletedamn, I'm sitting here watching my charts but I had it in my head that the big wave down would start around 8 a.m....missed the whole wave because of a preconceived idea!
ReplyDeletejb- That's just a lost opportunity, no big deal.
ReplyDeleteHow do you think I feel, stopping out of TZA @ 31.30 for a 3 cent loss? Now it's bidding with a 33-handle...
ReplyDeleteyeah, I was thinking about that 2nd - just a tad early, but your idea was spot on.
ReplyDeletewe could actually have a real meltdown today. of course i could stop the whole thing if i put my 3 shorts back on, that'd spur this baby higher.
ReplyDeleteMark - I'm holding steady in DZZ. I'm thinking that my entry point was clearly mis-timed; however, it's now at the 50 DMA which should provide for significant resistance and I still think this is heading down. I highly doubt politicians have enough backing for more stimulus and with at least some tax cuts looking like they will expire at the end of this year then in a way that is an austerity plan. Also, I expect the dollar to have some support should we fall further and should more news like today's jobs report in Canada (negative jobs growth) come out in other areas in the world, which I expect.
ReplyDeleteMore yelling now on TV...I love it!
ReplyDeleteI agree with your logic TOF.
ReplyDeleteI just had to turn it off, they make me nuts with all the yelling.
ReplyDeleteTYH @30.86, very tight stop
.01 above my stop right now...oh boy
ReplyDelete"i could stop the whole thing if i put my 3 shorts back on"
ReplyDeleteMake sure you post that move so the rest of us can capitalize on it. ;)
I don't know if gold's moving up as a shelter or from a perceived weaker dollar but I'm gonna guess it's the fear factor b/c falling prices doesn't fit my definition of a weaker dollar.
I do expect the majority of the weaker jobs picture was already factored in so I don't expect we're going to fall off a cliff unless a major bank somewhere goes under (which is a real possibility, I suppose).
Has anyone heard any more about the Chinese bank stress-tests?
SSO is now below my last sale price.
ReplyDeleteTYH off @30.91, cup of coffee and a bagel.
ReplyDeletewill do CP, I'll make sure to pass on the "all clear"!
1110 is the area I'm watching.
ReplyDeleteAll right guys, GL.
Is Sharkie back at the car dealers?
I was able to capitalize on a 10-cent move in BGZ- but it sort of feels like a 'consolation prize.' Only good for a Franklin.
ReplyDeleteOkay, I have lightened up by selling some income trusts: real estate, pipeline. Looks like bad news for natural gas and we could see a rapid decline in prices, so I will keep waiting for a buy signal. Have not received one since my last day trade. I have now repaid my margin loan with the sells.
ReplyDeletePM stocks look like they are ready to move up from being undervalued to fair value next week or two or three. Looks like the "buy the dip guys' can wait to get in. They hate missing out and get angry that they did not buy at the bottom.
cheapybob: what is up with RBY. Do you have any news from the company?
Nothing has changed at RBY that I know of. It was just too cheap, IMO and caught up in a panic.
ReplyDeleteBut now its at resistance on the downtrend. It has to get up and over it with strength or people will take profits and cause it to pull back, I think.
PAL - Sharkie, are you planning to hold into 8/12 AMC earnings? I'm thinking maybe we can get a pop fly over the 200DMA.
ReplyDeleteQE2 - The way things have gone, I seriously believe the administration will give the unemployed a big fat raise soon.
ReplyDeleteFrom Ritholtz's Big Picture:
ReplyDeleteQuote of the day.....
"All I ask is a chance to prove that money can't make me happy." —Anonymous
Money only makes you happy if you've got more than you can spend. Who wouldn't want to travel the seven seas on a yacht, or live in a castle in the Swiss Alps?
ReplyDeleteRealistically though, I bet there are more folks who wish they just had a better idea of whether or not they'll be capable of putting dinner on the table next month.
Which reminds me, has anyone found any good ol'-fashioned biscuit-soup recipes?
Don't look now but steel and base metals aren't doing too badly lately and I consider that a good sign. Hopefully they don't resume a downward trajectory in the near future.
ReplyDeleteDBB - I just noticed the RSI(7) was in the 80's a couple of sessions ago and now has turned down through 70, so I doubt it's going much higher from here.
ReplyDeleteThe yacht would be cool. I have no desires to live in a castle in the Alps though.
ReplyDeleteTropics yes, Alps no. But that's just me.
I'm still willing to take the chance to test myself and see if money truly doesn't make a person happy. I suspect enough money contributes in a small way to some form of happiness, or least the opportunity to pursue happiness.
I've always been told money makes the world go around, and right now the world seems to be in pause mode. I get the feeling money has stopped flowing.
ReplyDeletei tell you what...gold, while it has gone higher lately, has traded pretty poorly intraday. the moves are coming pretty much solely from those overnight spikes.
ReplyDeletewith the S&P i've noted to myself that when the markets open up and close down from where they opened or in the red for several times over a week or two, then we're most likely in a downtrend. the reverse is true.
if this carries over to the gold market then i think the odds are that it's in a downtrend. at least that's how i'm betting.
Canadian Investor: what seemed to you like a bad news for natural gas?
ReplyDeleteMy buy limit order on HNUZF was triggered today at $5.75 for 500 shares, and I placed a sell limit order at $6.25 for these shares.
I am glad that I dedicated my large TWM position as being a "long-term" one. Otherwise, I would have probably been shaken out of it two days ago, then yesterday I would have said that a small bounce is not worth chasing and I should wait for a significant drop in TWM before reloading, and today it would have been too late... I am also glad that I added to my total index put position yesterday with an IWM put.
ReplyDeleteDid you guys see the top picture at http://www.consumerindexes.com/index.html? If past correlations hold, we should see a -4% GDP growth in two quarters from now... Unless, of course, we get QE2, but my GLD+CEF+miners positions should take care of that.
Gold always is terrible intraday. That's why the shake out always works except on those holding actual metal.
ReplyDeleteThe usual exception seems to be on the turnaround days at the end of the panics, IMO.
ReplyDeleteSo if there's a serious grain shortage coming our way soon, what might the implications be for base and precious metals?
ReplyDeleteI can see how a grain shortage would tend to provide grain exporting currencies with decent crop yield somewhat of an advantage.
ReplyDeleteWow, that was close. Everything's going to be OK. Wheat fire in Russia will not effect vodka production. I was prepared to make a run on Stoli.
ReplyDeleteDE - And of course this one has been flying too. Or, should I say it's bumping up against resistance?
ReplyDeleteRIMM popping on news?
ReplyDeleteLooks like those put buyers on NLY are feeling the heat.
ReplyDeleteDavid: Obama told me NG was going down. Not directly and yes you might laugh at me, but seriously, if you don't listen to Obama you don't understand his power to move the market. BP has capped the oil leak and Obama gave a fine speech about its success. Listening to him, I knew energy and NG were cooked. Give Obama credit, he speaks his mind and I will use that to trade. I'm indifferent to his politics.
ReplyDeleteTC - That little pop may be nearing an end and if so, will some dinero tend to flow back into GMO from there?
ReplyDelete8/13 was the original settlement date set for the Hanlong financing but was officially pushed out two months as a result of "red tape holding up the process". Will this be a case of exceeding lowered delivery expectations?
What does wheat have to do with vodka production? Is that similar to the Krab meat in a can made with beef and chicken byproducts?
ReplyDeletePoor house cats must be thoroughly confused at this juncture, good thing most of them aren't alcoholics (yet).
NG: Why Obama might be right today but wrong tomorrow.
ReplyDeletehttp://www.propublica.org/article/natural-gas-drilling-watershed-806
Whatever Obama does, the Republicans always put a stop to unless it was their bad idea to begin with.
ReplyDeleteHmm, who's gonna build Obama's $10B NYC water treatment facility, HEK?
ReplyDeleteSold my Yamana this morning in the first half hour. Just bought RBY at 3.73
ReplyDeleteI never did like shale gas. Natural Gas is not all equal. Some of it is so dirty that it is dangerous.
ReplyDeleteAnon: I am actually watching that closely. If shale gets shut-down, then that will really be news to spike up Natural Gas. Uncertainty is a traders friend. Thanks for the article. I will be watching.
Dirty Natty has a problem with poor hygiene?
ReplyDeleteMON hit my stops at $61 today in all my accounts (I had 200 "unhedged" shares in my trading account and placed a sell stop for 100 shares, so now I only have 100 "unhedged" shares). Should I reload now at $60.09 all the shares that got sold this morning? :)
ReplyDeleteCP- HEK...No THAT would be something!!
ReplyDeleteI miss you PXP...Wont you ever come home???
ReplyDeleteShale gas is also potentially available in eastern Canada (Quebec) and there are proposals to drill in order to provide supplies in eastern Canada (eastern USA?). It is along the St Lawrence River and I can just imagine the disaster if it contaminates the river and the Gulf. It would be much more serious an environmental disaster compared to the BP leak (in my layperson's thinking). There goes the east coast fisheries.
ReplyDeleteI wonder where all this new found natty is going... and why if I throw a car battery into the watershed I get arrested while these companies get paid to inject many more times the same toxic brew into the water shed.
ReplyDeleteAnswer: No Pookie Lobby
ReplyDeleteCP: good question. I think this NG is shut-in for now. It has to be cleaned before it can be sold. I think they are working on that.
ReplyDeleteNice to close the week on a green note....
ReplyDeleteATVI - Right on the lower trend line here.
ReplyDeleteYep, I'm shocked my port is 3-figure green for the day as well. I should take these profits, LOL!
ReplyDeleteA little humour. When I was younger I took a road trip with a buddy in southwestern Ontario by bicycle. We stopped before lunch and bought some brew and supples for lunch. We decided to stop outside town by the side of the road and have lunch. While we were sitting there I could hear a hissing noise. I told my buddy that I sure hoped we were not in with some rattle snakes. I got up to investigate the noise and suddenly I spotted a rusted pipe, the source of the hiss. Low and behold this was a farmer's link to his own home brew natural gas. I was glad I was not a smoker.
ReplyDeleteHow far would $490 Billion go if they just used it to pay off mortgages? I had calculated the tab once and it seemed to make sense to just pay then as opposed to the pooch screw that was proposed.
ReplyDelete" The Obama administration is on track to reach a self-imposed stimulus milestone: spending 70 percent of Recovery Act money by the end of September.
The administration set the goal [1] in February, on the first anniversary of the bill. According to our Stimulus Progress Bar [2] that tracks spending, 62 percent of stimulus money has gone out the door, putting $490 billion into the economy. "
Wow, home brew natural gas, that's an unusual achievement!
ReplyDeleteDoes this late day rally tell us something about next week? Maybe, but maybe not. Maybe it happened simply because too many people sold too many positions in the morning and there were fewer sellers than buyers left in the afternoon. I think the recent collapse in the ECRI WLI growth index and in the Consumer Metric index provide a much better perspective about the future of the stock market.
ReplyDeleteWhy isn't the stock market reacting already to these indices? Well, a friend of mine told me a few days ago that his broker is telling him to ignore all the economic crap and just follow the stock market: "As long as the music is playing you have to dance!" the broker said. I wonder what will happen when people will realize that the music has stopped playing. It will probably be Lehman #2.
hpq ceo canned today, what a freakin' idiot!
ReplyDeleteHPQ - At this price, sounds like a buy to me...
ReplyDeleteHolly crap...I would have taken a shot @ 40.
ReplyDeleteLike JB sid...What a Fing idiot.
Re: Gold new
ReplyDeleteSubmitted by teamonfuego (2154 comments) on Fri, 08/06/2010 - 19:20 #66824 (in reply to #66820)
In shorting gold, I'm just thinking that:
(1) the economy will continue to grow gradually
(2) the political will to introduce another stimulus package and get it passed is almost nil, especially with elections coming up and with the public fuming about our govt debt levels
(3) at least some of the partial tax expirations (i.e., taxes on higher income earning people) amounts to a small austerity program
(4) the short term technicals on gold look weak
(5) the dollar will start rebounding as more countries will report that their own jobs growth is weak/non-existent (like Canada announced today)
(6) the Fed's ability to spark hyperinflation is far less than people think. They need a normal functioning banking system that can exponentially increase money throughout the system through extending loans. That's not going to happen because the larger banks still have crap loads of off balance sheet liabilities restricting them from lending capital. As a result, the Fed doesn't have the power to inflate our way out of this like the gold bugs think.
Gold has a massive public following and a huge premium because of that. I'd reckon that the vast majority of the public has been sold on the idea that gold is a safe haven and at some point they will get hurt very badly by investing in it. How many people that you know of that aren't exactly savvy investors are investing in gold?
TOF: here is how I view your points:
ReplyDelete(1) - agree
(2) - disagree
(3) - agree
(4) - disagree
(5) - disagree
(6) - too many directions to know what to say
Gold: disagree - less the 1/10th of one percent of the population has a clue with gold.
The Fed is trying hard to work deflation in the economy to move wealth from the public ledger to the government ledger.
Just my opinion.
If I'm not long gold, I don't think its a good bet it will go down, because there are many like me that are easily shaken out and have been. None of the newsletters I know of are bulls on gold shorter term, so everybody is on the sidelines, I think.
ReplyDeleteThat being the case, who bought it up today and why?
I see Rohmer didn't notice the trap door.
ReplyDeleteHPQ - On second thought, to take on anymore longs here doesn't seem like a sane idea based upon the scary descriptions of the employment portrait I'm reading and hearing at the moment.
ReplyDeleteI'm tempted to take all my long positions off the table come Monday morning...
Gold - Well, for some reason all metals have been on fire. I'm gonna try to figure out why but if I recall metals based first during previous sell-offs. Am I wrong about that?
ReplyDeleteI just heard an BAC/ML analyst express her opinion that she didn't understand why the market didn't plummet on today's news, should we be fading her bearishness?