Monday, November 15, 2010

11/15/10 The Snapshot Trader

The Snapshot Trader newSubmitted by 2nd_ave (4952 comments) on Mon, 11/15/2010 - 10:04 #74193
When it gets busy at the day job, and I need to decide whether to open any positions and which way to lean, my first stop would be the link to the RSI Tool- where fully 28% of the Cara 100 are tagged with a 'Sell Alert,' another 3% are in the DZ, none sport a 'Buy Alert,' and none are in the AZ.

100% cash.

CSCO may be good for a bounce should it slide into the teens and holders bail with each new 52-wk low?

77 comments:

  1. PWER, VNDA - small positions

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  2. Crazy...OK, bidding CADC @ 4.29.

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  3. MU - pulling back to 50MA

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  4. CADC - Earnings report - Conference call in progress, raising ready-mix concrete prices 25% on higher materials costs.

    Looks to me as if earnings increased, gross margin fell:

    -- Revenue increased 59% year over year to $31.0 million
    -- Gross margin at 13.33%
    -- Non-GAAP adjusted net income available to common shareholders up 35%
    YOY to $3.3 million
    -- Non-GAAP adjusted fully diluted EPS to common shareholders at $0.19

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  5. MU- Yep. I'll take a shot at 7.43.

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  6. Re: Bought DGP in premarket when they slammed gold newSubmitted by 2nd_ave (4953 comments) on Mon, 11/15/2010 - 10:28 #74194 (in reply to #74191)
    cheapy- Nice call so far on DGP.

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  7. Crazy prices this morning for both GMO and CADC, I'm hanging in there b/c I'm not convinced the music's over. This most likely will remain an LP record.

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  8. YCS - knocking @ 50MA from below. Am watching some of these to see how 'currency wars' unfold...

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  9. MELI - Looks more interesting than ATNI, I'm getting more bored by the minute on this one.

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  10. Well, Shanghai was nicely green while China Moly was down. I'm rather surprised GMO remains green today considering recent weakness in China Moly, which is one reason I took my original capital out of GMO temporarily.

    Considering the town meeting re: water permits scheduled for 12/9, I'm anticipating increased volatility for GMO going into the end of this month, providing potential re-entry opportunities.

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  11. YCS - Down 31%? That's some crazy stuff, isn't it?

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  12. CADC - Conference call:

    http://www.vcall.com/conferences/event.asp?ID=162490

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  13. Added RBY this am, cleaned out MM's at 3.76

    someone called GMP evidently came out with 6 - 8 mm oz est for RBY. didn't see it myself.

    now long 100,000+ RBY

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  14. just couldnt do it... sold the DGP about 40.40

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  15. DGP - Sold too early again... avg was 40.375, oh well... up $1200 on it, so at least it wasn't a loss.

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  16. what the heck, reloaded DGP at 40.11

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  17. CB- What's your price target on RBY?

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  18. had system lockup, didn't realize it for 10 or 15 min, i guess, luckily i noticed the numbers were different between the 2 systems

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  19. Any idea what shook up TBT?

    RBY- 5? Wow.

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  20. SGEN is interesting as hell here, but that gap has me spooked.

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  21. RINO - Rumors of fraud, which I doubt are true.

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  22. hey guys - got back from the bach party last night and fell asleep at 8pm, which is near a record for me. scottsdale was a blast. i had 16 friends in from all over the country. i never realized how much fun that town is.

    Anyway, how did everyone do last week? any good trades? for some idiotic reason i kept my BYD and SPY longs and closed those out today. i am still keeping my SPY index fund and international index fund (which has 25% in the Nikkei, which is continuing to go up just as I thought it would with a rising dollar and with expected intervention by the BOJ in the currency markets). I also went to the dark side today, buying SPY puts at around $120.75 on the SPY and long TZA at $20.26. Both are big positions and I'm only playing for another 2% downside to 1,180.

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  23. oh and i also sold my BYD today at $9.42-9.44 that I bought at $9.84 last week.

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  24. RINO - Short float better than 50%, what happens when they cover?

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  25. REDF - Can she recapture $3.21? If so, may be good entry?

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  26. Welcome back TOF. Glad to see you had a blast.

    I have been sitting on my hands. Tried to do a swing trade in NG via HNU.to. went from 0 to 21% to 0. Should have traded the smaller moves instead of waiting for the bigger move. Just spinning my wheels.

    Holdings in telecommunication stock, insurance stock and oil sands stocks (4) doing well.

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  27. Welcome back TOF. Kinda slow the last few days. I added to BAC on a nasty dip Fri. Other than that, nada. I did open WATG, but I think that's when you were here.

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  28. I don't like seeing gold red when I'm this long...

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  29. Yeah, yeah, it has a clear H&S pattern, but TIE is on the watch list again.

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  30. Might my stink bid on CSCO hit at 19.80???

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  31. TBT still screaming. No ideas?

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  32. TBT - Something tells me the FED has further delayed their QE?

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  33. That is a pretty big bar in CSCO just now. That might be it.

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  34. TBT & YCS similar with turns at 1:30

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  35. Republicans are requesting the FED unwind QE, not simply delay...

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  36. CI - It seems like we're in a very short term trading pattern where we should be taking profits on longs/shorts in a day or two at most. However, I think we go higher. I think the pattern is playing out just like it did back in late 1998. That is what I have been keeping an eye on for the better part of the past 6 months. I think it's healthy for us to pull back to the 1,180 level, which is where we were stalled out for a while, before going to 1,250 and above.

    Mark - What's up with WATG man? I haven't had a chance to follow that sucker closely but the rejection from the early May levels has been really nasty...not exactly confidence inspiring. I think normally you would like to see a shallow pullback from prior highs. Kind of like how PIR is trading. I'm actually beginning to think PIR is a great long over the next week or so. I think there's a chance that company gets bought out.

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  37. Guys, this market is going down. You know why? Check out the 5-day intraday TBT chart vs. SPY. Today, for example, SPY peaked just when TBT started rising.

    If the long-term rates were rising because of the expected strength in the economy, then the stock market would be increasing and leading TBT. Right now, however, SPY was rising while TBT was going down, but then, when TBT started rising, SPY made a top and started going down.

    Hussman noted on Sunday that the stock market was once again in the "overvalued, overbought, overbullish" territory but now also with "increasing yield pressures." This is the standard "jaws of death" syndrome, and last year we have already seen it twice: in December 2009 (leading to the sharp correction in January 2010) and in April 2010 (leading to the sharp correction in May 2010). So make your bets appropriately now...

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  38. And it seemed Greenspan was somewhat critical of the notion of Ben's QE this weekend on Meet The Press, Assuming I understood correctly, he basically said it's dangerous to borrow one third of the federal budget.

    I think Greenspan was out of place, he should've kept quiet. After all, his decision making process had a lot to do with getting us to where we are now.

    So it's rather interesting that sellers would show up ahead of the FED but maybe that was the plan all along?

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  39. My bet is that I dare the market to sell off so I can reload...

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  40. Crap, I pretty much lost my shirt with CADC today though, damn it!

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  41. DGP gave up at 39.60 and bought 1000 IWM puts

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  42. Seems gridlock is turning out to be not such a good thing for the market.

    Heck, maybe they just didn't want to see a parabolic runaway train and so have dampered the steam valve slightly?

    The money coming out of T's has to find a new home somewhere, but where?

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  43. TOF: I agree that the market is going higher. Commodities though are responsible for most of the current move up and that has me worried. I still can not figure out why metals are so overvalued(?). It can not be just based on the fall of the US dollar. I fear there is too much speculation and when the fire bell rings, not everyone is going to get out that narrow door. Some people left inside are going to get burnt. For now I holding a larger balance of cash and repaid my margin load by selling two/three weeks ago. Like most, I am waiting for the market to pull back, something it has not done since the beginning of July 2010. I am glad I was long for 3 months. To me the market is just noise here. Tug of war between the Bulls and Bears. I have to agree that the best persons for this November market are those who buy and sell frequently, which I can not seem to be motivated to do. (Or to those who can pick stocks that are moving to their own 2nd Ave music.)

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  44. Imbalances...

    BUY- CHK/SWN/DVN/AA

    SELL- BAC/WFC/C

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  45. Paving the road to QE?

    "Forecasters trim recovery expectations: Philly Fed"

    Something's gonna give.

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  46. Looks like Vad has his 'Taoist Trader' Course up and running...

    http://www.realitytrader.com/taoisttrader.html

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  47. I think QE is dying. QE1 failed. QE2 if attempted will fail. They all know it. At some point they will have to admit they have been trying to hide the depression from the people "for their own good".

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  48. Today, the market decided QE2 might not be completed or save anyone...

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  49. David - So are you basically saying the market is moving on the probability of QE, or just in positive correlation with T prices?

    T's usually increase when there are no better places to obtain "safe" returns? As foreign rates rise, those returns are more attractive?

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  50. QE - How can we claim it failed when rates are at record lows?

    I need a little help interpreting these terms and how they're being used, it's like saying "the software sucks".

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  51. Seems like all the market concluded is that the Fed is not going to defend the very long-end of the curve.

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  52. "At some point they will have to admit they have been trying to hide the depression from the people "for their own good"."

    That's a powerful statement and very wel could be the case but how do we know for sure as the equities market has yet again climbed out of another hole?

    An assuming you're correct and based upon the action from 2008, I wouldn't anticipate PM's would be the best safe haven.

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  53. The FED has already said they're not defending the long end of the curve, which maybe begs the question of the purpose of QE?

    If QE was supposed to keep long rates down (to assist real estate market), the why not concentrate QE on the long end?

    To me, that would be a valid concern over the intended purpose of the QE program.

    Remember, Ben has said himself that QE will not improve the economy to desired levels all by itself, "other public agencies must participate for this to have maximum impact".

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  54. QE2 as I understand it is concentrated on the intermediate maturities not the 20+ end... IEI and IEF fared better than TLT

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  55. David - I don't think we can say for sure the market is going to go down because TLT is crashing. In my mind there was a huge premium built into that anyway because of a leftover fear/anxiety caused by the 2008/9 crash, so maybe it took a realization that the economy is improving before it ultimately crashed down to a reasonable level. I'm mostly short for a quick trade right now and I actually sold half of my SPY puts right before the close for a 40% gain. I'll probably sell the rest in the next day or two.

    Keep in mind how good the econ reports have been over the past few weeks: great jobs report, jobless claims getting much better, industrial production/ISM numbers better than expected, better retail sales. And the kicker: valuation is cheap and earnings are better than expected. That tells me we stall for a total of 2 weeks before going higher. I think we close out the year at about 1,275-1,300.

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  56. "QE2 as I understand it is concentrated on the intermediate maturities not the 20+ end."

    That's the way I understand it as well, I'm attempting to comprehend the basis for claims that QE has failed.

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  57. So I suppose one could make the case that maintaining a steep curve might entice banks to make new loans in order to collect the spread.

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  58. "So I suppose one could make the case that maintaining a steep curve might entice banks to make new loans in order to collect the spread. "

    Chicken - that's what I was saying last week or the week before maybe. By focusing on the short end, the long end could rise and provide more profits to the banking sector. I think XLF could be a good buy right here...

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  59. "I think XLF could be a good buy right here... "

    Yes I agree, assuming QE actually proceeds forward. Should also assist REIT dividends as well I would think:

    http://seekingalpha.com/article/235978-profit-from-qe2-with-reits

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  60. Re: The Snapshot Trader
    Submitted by meridian (5 comments) on Mon, 11/15/2010 - 15:40 #74210 (in reply to #74193)
    A little more info on CSCO's drop and the rest of the tech area:
    http://tinyurl.com/ciscocoal

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    Re: The Snapshot Trader
    Submitted by Dave M (288 comments) on Mon, 11/15/2010 - 15:49 #74211 (in reply to #74210)
    This is consistent with a comment Rosenberg made last week as well - a negative Cisco surprise in both 2000 and 2007 proved to be leading indicators of the equity market.

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  61. Re: The Snapshot Trader newSubmitted by teamonfuego (2298 comments) on Mon, 11/15/2010 - 19:08 #74217 (in reply to #74211)
    Dave - maybe, maybe not. I don't know why Rosenberg hasn't pointed out that CSCO missed earnings last quarter as well, yet the equities market has risen from about 1,070 then to 1,200. He would probably explain that this was due to the dollar dropping 5% in that time frame. Of course, he wouldn't point out that the dollar is flat from a year ago while equities are up about 8 to 10%. Cherry picking data to support your thesis. I've learned that is the name of the game when it comes to permabears.

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  62. CSCO - Isn't that a no-brainer with a $19 handle? Sure, still heading south but how much further do they plan on taking it before buyers say "enough is enough!"?

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  63. I'm a little amazed that bears can so easily rail against QE, and PM bugs as well, claiming inflation a result of FED intervention is a little irresponsible unless the thesis attempts to incorporate other factors such as natural resources limitations, etc., trading T's is one of the FED's main functions.

    I'd much rather deal with inflation and the challenges it poses as opposed to deflation.

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  64. SPY flirting with the 20 right now.

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  65. Since Sept. 01, the 20 hasn't been breached.

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  66. "David - So are you basically saying the market is moving on the probability of QE, or just in positive correlation with T prices?"

    CP -- I think we have both now, since TBT is not following the market now but leading it.

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  67. "And the kicker: valuation is cheap and earnings are better than expected."

    TOF -- why do you keep saying that the market is cheap now? Hussman demonstrated convincingly that the market is VERY expensive now, most expensive it has ever been outside of the dot com bubble period and the top of 2007. He showed that the measures that some analysis use to claim the market is cheap have VERY poor track record before the 1980, when the current bond bubble has started (which has mostly likely come to an end now according to Bill Gross). Here is the link to Hussman's article: http://www.hussmanfunds.com/wmc/wmc100802.htm

    If you can find any logical errors in it, let me know. Or are you using some valuation measure that he hasn't analyzed in his article?

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  68. QE2 won't help get more people employed unless its by increasing exports due to a debased and devalued dollar, which would take an additional 30 or 40% decline in the dollar's value, I would guess.

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