Sunday, September 12, 2010
9/13/10 Staying Alive
Well now, I get low and I get high,
And if I can't get either, I really try.
Got the wings of heaven on my shoes
I'm a dancin' man and I just can't lose.
You know it's all right. It's OK.
I'll live to see another day.
We can try to understand
The New York Times' effect on man.
Life’s goin' nowhere. Somebody help me.
Somebody help me, yeah.
Life’s goin' nowhere. Somebody help me, yeah.
I’m stayin' alive.
I see strong futures right now. In fact, I think we blast certain traders out of their shorts Monday morning, just before we spike down. Cash is a pretty decent vantage point from which to observe the theatrics- whichever way it opens, and whichever way it closes. At least it helps me stay alive.
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If this move in the ES is to be believed, it HAS to break it's OG high off 1118.
ReplyDeleteMark- I notice my earlier comment was lost.
ReplyDeleteThis coming weekend I have the little guy with me 24/7, as the rest of the family will be attending a wedding out of town. Hopefully, David and/or vb (who may still be in town?) might be able to meet you in the South Bay, which is their neck of the woods.
If you like Aghan cuisine, I would recommend Kabul- http://www.yelp.com/biz/kabul-sunnyvale
Thanks 2nd- I knew next weekend was a "Hail Mary Pass"...In more ways than one. We have 3 games here Sat. and then head down south. Basically the car has to be packed Friday night.
ReplyDeleteLooks like you got the better deal in your trade next weekend ;)
I do like Aghan cuisine, and so does the family. Thanks.
OK VB/David...You guys are my only chance for an hour or 2 of sanity!!
Hmmm..so now I see crude at it's highs and the ES .25 below the OG high. Perhaps traders were expecting more stringent requirements out of Basel III?
ReplyDeleteEither way, I'm happy to be in cash here.
Well, after studying up a little now I'm leaning to the long side again but we'll see how that turns out.
ReplyDeletehey mark,
ReplyDeletenext weekend?? can't do -- sorry, i have to be in yuba city next weekend!
is your daughter in a tournament? sorry, I missed the last couple of days. Catching up now
Hi VB- No tourny, but 2 State Cup qualifying games. First in Saratoga @ 9:00, and the 2nd in Redwood City @ 5:00. Sorry, we'll miss you.
ReplyDeleteOK David, your my last chance!!!
Damn boys....They broke the OG high.
ReplyDeleteCP, I'm guessing your take comes from the recent data out of China?
I think the data out of China is encouraging, at least on the surface. I tend to believe they're serious about their economic development while at the same time respect the skepticism that some folks retain.
ReplyDeleteI also think there are gray clouds looming for Europe and US economies, or perhaps it would be better to call them "challenges".
Political gridlock is probably the largest danger at this point, but even this is debatable. We still don't know much about where the agenda is headed on almost all of the issues, so it's not unreasonable to anticipate investors will remain on the sidelines as long as they can afford to.
S&P PEG is 0.77, indicating that as a whole, equities are likely underpriced (considering the emotional forces at work, they probably are).
Heck, maybe political gridlock will turn out to be our salvation this time around, if WDC can't accomplish anything, they're not harming anything?
Mark, I have just returned from my vacation at Laguna Beach, and so I should be around next weekend. I might have some local plans, though, so which day/time are you thinking about?
ReplyDeleteRe: Adding 6 long-range missiles>SPY Oct 111 puts
ReplyDeleteSubmitted by goldbug58 (102 comments) on Mon, 09/13/2010 - 03:26 #69023 (in reply to #68918)
2nd, I still like this call for SPY Oct puts; if we move into the 1115-1129 range on the S&P500, which appears very likely, judging by futures. The way the market is going right now, looks possible to test the 1129 top of Aug 12th and the June top at 1131. I don't think the market has staying power near or above those levels, but I also think the reversal will be swift and hard when it comes so I want to be on board. Looking at the 108-112 strikes. Your thoughts?
Re: Adding 6 long-range missiles/ Defused last Friday newSubmitted by 2nd_ave (4561 comments) on Mon, 09/13/2010 - 06:17 #69028 (in reply to #69023)
ReplyDeletegb58-
(a) As you know, my time frames are now mere fractions of what they used to be. Were I to play SPY puts today, I would let the market tell me when and which strike.
(b) You realize, of course, that my sentiment reads can (and almost always do) change on a dime. The structure of a bull trap can crumble and be reassembled into a bear trap as quickly as an intercepted pass can change the likely outcome of a game. Another way of putting it would be to say that any take I have (which may in fact be [quite honestly] stated using terms such as '1200 by December' or whatever- it is, after all, exactly how I feel at that moment in time) comes with a short expiration.
(c) To be honest, I have no plans to trade today. My main goal is to stay alive, and after a decent streak, experience sidelines me for a day or two.
vb- Yuba City? I drove up there last January with a colleague for a sales-related visit. Once you leave Sacramento behind it's a pretty relaxing drive. A bridge connects you to the 'twin city' of Marysville. Lots of new buildings constructed recently, mainly related to Sutter Health.
ReplyDeleteGood Morning!
ReplyDelete2nd,
yes. job related adventure.
Mark, She is a little powerhouse! and now jr is a rising star too (4 goals?)
how about redf today? any re loaders?
I had an interesting time re-living the 911 attacks this weekend.
ReplyDeleteDid you guys celebrate the greatest attack in the entire history of international terror?
What I realized was, even though I live less than an hour from Manhattan, I haven't been there in over 6 years.
The next thing I realized was, 911 took the starch out of my city-based lifestyle and I just lost my urge to be an urbanite.
Some people would say, and I wouldn't disagree, that I am suffering some of the aftereffects of that day still. It is amazing the millions of memories that the services brought back to me.
Some people died IN 911, some people's careers died the day AFTER 911, (such as mine), and even the desire to live and to prosper and to accumulate is something I never really got back into the swing of. And I hadn't even realized any of this until 9 years later.
vb - I never unloaded REDF so reloading here would require and even larger position, which is downright scary.
ReplyDelete*an even*
ReplyDeleteLandry-
ReplyDeleteRandom Thoughts:
The market had an okay day on Friday.
For the most part, it just sort of drifted higher last week. This combined with the fact that it remains overbought suggests that we could see some corrective action.
However, as I said in today's trading service, that in and of itself isn't reason enough to get excited.
The most important thing to remember for now is that the big blue arrow continues to point sideways.
And, as a trend follower there's nothing to do when there's no trend to follow. Have I told you this lately?
For the aggressive, you might want to keep an eye out for an opening gap reversal (OGRe), especially since the market remains overbought.
shark,
ReplyDeleteme too.
I was in ny on 9/11 in my upper west side apt. It was the worst day of my life. I could write a book but decided not to do it.
ngd down 6.23%
ReplyDelete2nd, are you getting ichy fingers for faz
ReplyDeleteVB...I had NO IDEA you were/are a New Yorker!
ReplyDeleteI was living on east 87th. I watched that day unfold from the roof of my office, west 38th and 7th.
ESLR anyone?
C looks interesting here.
ReplyDeleteMorning....Might open SDS in the IRA.
ReplyDeleteDavid- Hope you had fun!!!
We'll be staying Sat. night in Saratoga. Hope to be there about 5:00.
TOF- Congrats on the death grip!!!
ReplyDeletemark, aone flying
ReplyDeletevb- Not seeing any setups right now. Sometimes it pays to wait for the right pitch.
ReplyDeleteV looks like it wants to retest 66.07.
ReplyDeleteVB- AONE...comments this am. by the CEO.
ReplyDeleteshark,
ReplyDeletetoo bad we didn't know each other. (57th between 8th and 9th). I haven't been back since
Long C at $4.00. Long C October $4 calls at $0.16.
ReplyDeleteLong C Sept $4 calls as well at $.06. Small positions in the options.
ReplyDeleteV....no joy.
ReplyDeleteOn days like this, traders always feel like they need to get on board. I don't think it's necessary.
ReplyDeleteSo far, it's fair to say we got some follow through this am.
ReplyDeleteWell, they're certainly blasting shorts. I hope (sincerely) that anyone holding a 60% weighting in an 3x inverse index ETF stopped out much earlier.
ReplyDeletePAL in play.
ReplyDeleteWatch it blast thru it's 200 day to the upside.(hopefully)
SPY- 113.20 is the Jun 21 high.
ReplyDeleteI suspect we trade sideways/slightly down for a day or two but end the week around 1,140.
ReplyDeleteFYI - I just read that operating earnings for q2 2010 was $21 for the S&P. If you annualize that, it's $84/share. Typically forward p/e's are 15.5 but if we assume the multiple is 15.5 times current year's earnings then you could make the case for the S&P to be trading at 1,300.
ReplyDeleteGMO starting to get that good looking look.
ReplyDeletePAL is a frigging perennial disappointment.
ReplyDeleteI believe the last time the TED spread was this low:
ReplyDeletehttp://noir.bloomberg.com/apps/quote?ticker=.TEDSP:IND
and the copper price was this high, the S&P was at 1,200. If next year's S&P earnings estimates of $95/share proves correct we're trading at less than 12 times earnings. There's definitely an argument for more upside.
TOF, as I wrote previously, I think TED spread has become an irrelevant indicator now, since no big bank is expected to fail in the near future. In fact, they have been steadily raising cash for many months now.
ReplyDeleteThe copper price, however, is a good indicator to look at, and it is suggesting that the economic outlook is not that bad now. The $USD has also broken down below its recent support today, and the 6-month chart shows a clear negative correlation with S&P. So if a new leg down commences in $USD, the equities will lift.
The risky stocks (the Russell 2000) have clearly broken today their 5-day intraday resistance level, so I would say the market is set to keep moving higher.
My plan is to reload some IWM puts if it drops back below its recent 5-day intraday resistance at $64 (I closed my IWM puts when it was around $60).
ReplyDeleteI like MU here.
ReplyDeleteI don't know guys....TLT/TBT have flipped. SPY better hold 112.06.
ReplyDeleteV- I guess 57ish is possible.
ReplyDeleteMU- Have this one always on my screen. Just checked FINVIZ. Is the FPE of 3.9 to be believed??
ReplyDeletelong mu
ReplyDeleteMark - there are too many skeptics / people looking to short this rally in my opinion. I think we're definitely going higher.
ReplyDeleteLook at what Buffett just came out and said about the economy...see's strength in all of his businesses...to me when he says that i think then why is the market trading at only 12 times earnings? maybe it should be higher and people are just too pessimistic?
TOF- I agree on the sentiment issue. MOG is pretty neutral right now, though always constructive on energy. I hope your right.
ReplyDeletePAL - This is what happens when you dilute shareholders then turn around and throw the money into a clapped-out gold mine. $1500/oz to produce Au simply doesn't work even if you try to make up the difference in volume.
ReplyDeleteShareholders don't like being screwed, do they?
Now if only I could get into my trading account my day might become a little brighter, perhaps I need to re-locate to Tennessee?
"Fastest U.S. Internet service slated for Chattanooga"
TOF, if you want to figure out the true market valuation now, I suggest you read the following article from Hussman, titled "Valuing the S&P 500 Using Forward Operating Earnings":
ReplyDeletehttp://www.hussmanfunds.com/wmc/wmc100802.htm
He said it is one of the most articles he ever wrote.
And dip 2 was clearly bought today...
ReplyDeleteDamn...HUN really took off today.
I am invoking the rule of "not letting a profit turn into a loss" and moving up my stop on INTC (that I purchased at $18.06 last week) to $18.20/$18.19.
ReplyDeleteDavid- I miss my sugar :(
ReplyDeleteSo am I, Mark! My wife is seriously cutting down on sugar in our diet, and it is affecting my trading. :)
ReplyDeleteWell...that too David. But I was referring to SGG :).
ReplyDeleteDip 3 bought.
ReplyDeleteREDF dips keep getting bought up.
ReplyDeleteTLT = Bear Trap
ReplyDeletejust one brothers opinion.
Strange finale for today: a spike up in both equities AND bonds!
ReplyDelete> Well...that too David. But I was referring to SGG :).
ReplyDeleteI know you did, Mark. :)
2nd - It might just be time to revisit your long term position in C...I was doing a lot of research on these banks over the weekend in light of the whole Basel III thing and man, they sure do look pretty cheap.
ReplyDeleteHere are a few interesting articles for starters:
http://blogs.wsj.com/deals/2010/09/10/three-reasons-to-be-bullish-about-us-banks/?mod=yahoo_hs
http://www.reuters.com/article/idCNN1011272020100910?rpc=44
Regarding C: Net equity is $154.8 Billion versus Market cap of $115.6 Billion. Typically banks trade at 1.5 times book value, which would equate to a share price of about $8. I know, I know, Citigroup is lying about their asset values so you can't trust them. Well, in the odd chance that they aren't lying about it then well the stock is pretty darned undervalued. They're holding over 20% of total assets in cash so we know that's not overvalued. The company has sold off a lot of its non-banking assets so it will avoid a lot of the political/media backlash the other banks are getting because of their non-banking assets. I don't know, under $4 the bank looks like a pretty solid buy for the longer term. I might just sell a little of my beloved REDF for this one. Dividends will probably come back in a year or so and build up to around $0.20 to $0.30/share, so in due time you'd be getting a 5 to 7% dividend on your current investment. Not too shabby.
Team,
ReplyDeleteSo they are hoarding cash which means they cannot lend, probably due to lack of demand. I don't trust the accounting on the other 80%. Book value? Considering C and others were called "zombie" banks two years ago, what has changed? Not much except an infusion of cash from the Gov, IMHO.
C - These banks are probably working their way out of debt via Treasury spreads? Still though, the real estate losses on foreclosures and credit loans must be astounding!
ReplyDeleteIllini - C has sold off a crap load of assets and raised a significant amount of capital...all of that has turned into excess cash on their books.
ReplyDeleteLeanding doesn't have to increase dramatically for things to become better for banks. All it has to do is stop shrinking. Every month for the past 9 months or so loan write offs have been getting better and better. Meanwhile a large portion of the shadow banking system has disintegrated and those assets have been moving toward traditional banking. All of this is benefitting traditional banks like C more than the yield curve, which from what I've read doesn't have as big of an impact on banks' bottom lines as deposit growth.
Where will the loan demand come from? I say it will start with corporations. Corporations are doing really well right now but don't have huge incentives to grow. I think offering tax incentives like this capital write off incentive could spark significant demand for loans by businesses. Remember, you don't want to be buying these banks when times are good. You want to buy it when you start seeing some stabilization. I think we've seen that.
GRMN - Looks like I shoulda kept this one a bit longer...
ReplyDeleteSPY - RSI(7) is now in the 70's.
ReplyDeleteCREE - Hey, finally a green bar!!!!!!
ReplyDeleteFCX - Well lookie there, this one broke out...
ReplyDeleteMU - Sheesh, is it going back to $9???
ReplyDelete