Tuesday, November 16, 2010

11/16/10 Cloudy With A Chance Of Screwballs

The Snapshot Trader- Cloudy with a chance of screwballs newSubmitted by 2nd_ave (4954 comments) on Tue, 11/16/2010 - 07:17 #74240
So yesterday it was buy-out mania, and this morning the media wafts an Irish-Chinese spear into the headlines.

There is another definition of screwball: 'A pitched ball that curves in the direction opposite to that of a normal curve ball.' Were we to fade the media pitch we would be buying into the 'just a pullback' take that seems to be making the rounds. What if it's a screwball pitch that we should in fact turn into?

It's almost easier having no time to game it right now. I see the same RSI snapshot this morning, and plan to take a pass on trading today.

64 comments:

  1. Sounds like you had a great time TOF!! Too funny man :)

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  2. Fat dumb and happy was not a animal house quote, that quote is my Dad's. He saw being fat dumb and happy as the ultimate path to nirvana. The American dream really. The Animal house quote was: "Drunk, Fat and stupid is no way to go through life young man." WHich is closer to the path I am traveling.
    Bob

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  3. Looking for an entry in V. The 100sma maybe??

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  4. So far that dip in V/AXP was bought.

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  5. dudes this muni situation ain't pretty. i wonder if we should be buying PCK and others though. price crash + volume spike usually equals buying opp.

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  6. smart trends is calling 11,100 the bottom. we are there. Let's see how smart, smart trends is

    pbr, slw, ngd and vgz. byd

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  7. PCK - Sweet looking divy there. I'm gonna keep it in mind should it continue getting sweeter, thanks!

    Still can't locate my shirt someone stole yesterday...

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  8. Looks like I might have missed a panic opp. in CADC.

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  9. CADC - Somebody must like it or MM wants it higher? Too funny, guess I'll find out if being a snail-trader provides advantage?

    Somehow I have the impression these past couple of days are more stunt than anything else.

    Sell away guys, let me know when you're done so I can grab the bargains!

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  10. Things that concern me about Bank of America http://tinyurl.com/26ngfal

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  11. CSCO - Anybody see a potential for a low $17 handle there?
    QCOM - Remains above $40!

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  12. BOA - They're not the only ones caught with a mountain of foreclosure inventory and it will continue growing until they get serious about marketing it.

    So far, their foreclosure list is sparse with photographs of the properties and is very scant with detail, the level of urgency one might anticipate doesn't seem present.

    In fact, there doesn't really seem to be high levels of urgency throughout the sector extending into government. Perhaps QE really has it's advantages after all?

    However, TOF's absolutely right in that muni's are on the hook if property taxes aren't paid, what's the plan there? Withdrawal could get quite painful?

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  13. GL guys. I placed a SSO bid @ 42.16 just in case.

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  14. Re: Crazy market this morning/ SLW newSubmitted by 2nd_ave (4955 comments) on Tue, 11/16/2010 - 10:45 #74258 (in reply to #74252)
    Bill- Also brutal. This shakedown feels higher on the Richter scale than the ones we've had the past couple of weeks. It may end up looking 'average' point-wise, but the price action is wild. I'm actually starting to take a look at SLW...

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  15. 2nd- SLW has a recent gap to fill @ 29.80, if you believe in such things.

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  16. Although foreign construction workers can just go back to their respective poverty stricken countries, I would imagine the plight of the middle class must be having some negative impact on state income from sales tax shortfalls as well.

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  17. PCK - Two of the last three candlesticks are green now, I'd say there are definitely buyers stepping up to plate?

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  18. RB - You're not living up to all the terms of your chosen path...!

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  19. things getting very interesting!

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  20. Wow! Great day for me so far, finalfreakingly. Sold all of my TZA at $21.90 that I bought at $20.26. Sold my SPY $121 Puts at $3 that I bought at $1.09 average. Sold my SPY $122 Puts at $4 that I bought this morning at $2.75.

    Went long BYD at $8.46. Long ACI at $27.55

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  21. CSCO @ 19.51 newSubmitted by 2nd_ave (4956 comments) on Tue, 11/16/2010 - 11:34 #74264
    Feels like short-term capitulation has finally seized this stock.

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  22. Re: CSCO @ 19.51/ Stopped out 19.40 newSubmitted by 2nd_ave (4957 comments) on Tue, 11/16/2010 - 11:55 #74268 (in reply to #74264)
    Yeah, I know that seems pretty lame, but I don't like the action, and I don't need to be holding.

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  23. Long PIR at $8.85. Good to be back in the wicker wheelhouse again.

    David - check this report out on WATG:
    http://gallery.mailchimp.com/6e9438e8c02bfd83d4ebb47f8/files/WATG_11102010.pdf

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  24. Long ACI Dec $26 calls at $2.3 average

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  25. "David - check this report out on WATG:
    http://gallery.mailchimp.com/6e9438e8c02bfd83d4ebb47f8/files/WATG_11102010.pdf"

    Damn... That's why these Chinese stocks have such low P/E multiples... One of the reasons for such low P/Es, as I have read before, is funky accounting practices in China, and now I see what that means...

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  26. A few limit orders were hit for me today. First, one January $57.50 put on MON was sold at $3.50. Then, 1000 shares of REDF were purchased at $3. Finally, a partial execution of 1750 out of 5000 shares of ECUXF at $0.95 (partially replacing 9000 shares I sold at $1.05).

    Now that buying ECUXF under $1 has become a reality once again, I am placing another buy limit order for 5000 shares at $0.85.

    At the same time, I am placing a buy to cover limit at $23.95 for the 300 shares of SLV I shorted last week at $25.95. If SLV drops to $23, I'll actually start thinking about going long silver...

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  27. As I was going to bed last night, a thought has occurred to me as to whether 2nd_ave's prediction of a Black Tuesday will finally play out this time. Looks like his intuition was onto something once again. :) I am fully welcoming the current sell-off as long as it is only a temporary one and will last for at most a couple of weeks. If, however, the double top in S&P at 1220 is the end of the bull market that started in March 2009, then I guess many people are in trouble...

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  28. Re: Cashed in Shorts newSubmitted by 2nd_ave (4958 comments) on Tue, 11/16/2010 - 12:40 #74272 (in reply to #74269)
    tof- Of course we're both just making predictions here, but I think we get closer to SPX 1150 before the selling lets up.

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  29. "I think we get closer to SPX 1150 before the selling lets up."

    2nd_ave, so you don't think that this is the start of a new bear market -- a possibility that Bill mentioned in his morning report? What do you think would be needed to actually turn this market into a bear market? Bernanke withdrawing from QE2?

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  30. At least I can say my port is outperforming gold today...

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  31. Actually, I could almost say I'm nearly flat if I were to factor in the U$D gain.

    It would be sweet if equities and U$D correlation became positive at some point but I'm not counting on it b/c longer term we need a weaker dollar and I remain convinced that's where we're headed.

    So David, have you identified a bargain in WATG?

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  32. CP, I have already sold a bunch of December $10 puts on WATG for $1, and now I just hope that it doesn't go to $5 and stay there for years...

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  33. Wicker Wheelhouse - Too funny, I liked that one BTW!

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  34. WATG - Looks as though is headed for $8 from here to me, which flies in the face of my understanding of the fundamentals. You know how these things typically go though, not as you might expect.

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  35. Too funny... LOD for AAPL was 300.09. Guess I'm not the only one watching that level.

    Wicker Wheelhouse. Priceless :)

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  36. Chicken - The Wicker Wheelhouse has always been good to me, ever since I started entering it a year ago. Knock on wood...

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  37. MELI - I recommended that stock to my friend in the fall of October at $20...said it was an amazing long term buy. He held on to it until January I think and sold it at $14. He jokingly would give me a hard time about it. Now I give him a hard time about it.

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  38. I just placed a GTC order for CLNE @ 13.41.

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  39. TBT failed it's 200sma 2 days in a row.

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  40. Check out the double gap in AA. Now BOTH will only get filled on the upside :)

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  41. More on Municipal Bonds

    By Michael Connor
    MIAMI, Nov 16 (Reuters) - Awash in a deluge of new debt offerings, the U.S. municipal bond market on Tuesday was caught up in the year's worst sell-off that shows no sign of ending quickly.

    Tax-free bond prices slid steeply for a second straight session, taking yields up in most maturities of top-quality, debt at a double-digit pace as high as 18 basis points.

    Since Nov. 5, yields on closely watched AAA-rated 10-year and 30-year maturities on Municipal Market Data's benchmark scale have shot up by at least 40 basis points, a sharper, more concentrated change than sell-offs in March and September, according to MMD analyst Domenic Vonella.

    Portfolio managers, analysts and bond traders said the increase in new deals was aggravating qualms about possible U.S. tax policy shifts, the credit worthiness of some issuers and ugly relative values compared with Treasuries.
    Munis are a favorite of affluent, often-retired individual investors because they provide tax-exempt interest payments and are widely regarded as stable assets. Some portfolio managers have said a sharp muni-market correction was needed to raise yields to levels needed to lure individuals back.

    Inflows to muni bond mutual funds, a key indicator of demand by small investors in the $2.7 trillion market that finances roads, schools and other infrastructure, have shriveled in recent weeks.

    "It's a perfect storm," Vonella said.

    Signs for a quick turnaround in prices were few, according to the latest weekly MMD survey of traders and portfolio managers. Bearish sentiment for the week ahead more than doubled from 36 percent to 79 percent.

    Dour expectations for the coming four to eight weeks rose to 50 percent from 27 percent, according to MMD.

    New offerings flowing from cities, states and other governments were a chief concern, according to a survey.

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  42. This week's new deal calendar was forecast to nearly triple to $24.4 billion this week, although a chunk of that was taxable debt, mostly in the form of Build America Bonds. Tax-exempt supply was estimated at $8 billion to $10 billion.

    Prices of AAA-rated munis tracked by MMD fell enough at midday to lift yields by as much as 18 basis points, according to MMD's preliminary reading for Tuesday. Tax-free yields jumped as much as 12 basis points on Monday.
    On Monday, yields on top-rated 30-year bonds finished up 11 basis points at 4.31 percent. The 10-year closed at 2.75, up 11 basis points from Friday, according to MMD.

    Meanwhile, some issuers were choosing to get out of the way of the week's huge supply as several competitive bond sales were postponed. A $380 million Wisconsin Health and Educational Facilities Authority revenue bond issue for Aurora Health Care was downsized to $142 million due to market conditions, according to a market source.

    A $180 million revenue refunding bond issue for Georgia's Gwinnett County Water and Sewerage Authority was pulled after the county on Tuesday rejected all the bids it received due to market volatility, said Michael McDonald, a financial advisor at Public Financial Management.

    "We were not able to achieve the required savings on the deal," he added. (Additional reporting by Caryn Trokie in New York and Karen Pierog in Chicago; Editing by Andrew Hay) ((michael.connor@thomsonreuters.com; +1-305-810-2688; Reuters Messaging: michael.connor.reuters.com@reuters.net)) Keywords: MARKETS MUNICIPALS

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  43. JB- Are you past the 31 day window for HEK? I'm looking to re-enter soon.

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  44. cheapy said yesterday that he bought 1000 puts on IWM. They must be up at least 30% today, so are you up a few hundred grands for today, cheapy?

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  45. Mark - it seems like this spot (1,174) is a spot that is being defended. It has come down to this level twice and not gone lower. I suspect a lot of people are watching it for some reason. If it breaks then I'll have to reconsider my long trades I entered into today.

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  46. TBT is being dumped now. That should help the equity market somewhat...

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  47. I suspect a big bounce is coming into the close. Bulls will get confidence if this last defense of 1,174 is held.

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  48. TOF- Yeah, monthly lows are usually pretty solid. We'll see.

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  49. Action in the markets now are almost identical to the last quarter of 1998. It's crazy how similar they are. If the pattern follows then we're basically right around a tradeable bottom that should be bought.

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  50. BAC didn't follow that last run down.

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  51. I suppose being 70% cash makes this easy to say, but none of this makes me nervous.

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  52. Mark - I'm now about 90% long once again after this morning's trades and I'm also not nervous at all.

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  53. IWM puts sold

    Went 100% long DGP and RBY at 1330's gold fut

    Will buy 1 oz coins if we hit 1300

    This, IMO, is a panic to scare American investors out of stock/commodities and into US govt debt, which I would bet is being sold to us be the rest of the world. Anyone that panics will find themselves the proud bagholders of US debt.

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  54. "This, IMO, is a panic to scare American investors out of stock/commodities and into US govt debt, which I would bet is being sold to us be the rest of the world. Anyone that panics will find themselves the proud bagholders of US debt. "

    I agree completely, don't want to hold the U$D here, they'll have to take it way higher than this to convince me and even then I'll just sell my remaining dollars.

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  55. I just got back and saw that I got stopped today at $36.50 out of the 200 shares of TBT I purchased on the last FOMC at $34.60.

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