Friday, November 5, 2010

11/5/10 1-0 v 0-1/ Dust Off The Plate

For those of us on the sidelines, what is the right play here? We each have our own time frames, but to swing correctly at the next pitch (as tof put it last night) requires the right frame of mind.

If you're an individual investor, the correct count is 1-0. If trading is an endless game played over a lifetime, then there are no 'strikes' assigned to pitches you step away from, even if they sail over the strike zone. In fact, the count might well remain 1-0 for a long, long time.

In contrast, if you are a fund manager, the correct count for having missed yesterday's run-up is 0-1, as you are assigned a strike for falling behind the benchmark. Which may explain why fund traders chase prices.

The right move for me right now would have to be tapping both cleats with the bat while waiting for someone to dust off the plate. No point in jumping in until emotions ebb.

83 comments:

  1. What a gift...I was able to get out of my long UGL and GLD calls at a decent profit. Stronger economy = tough going for gold.

    ReplyDelete
  2. Sold STT at $45.72 from a week or so ago.

    ReplyDelete
  3. Long MGM at $12.40. I don't know what to make of the chart but jobs + higher markets = more disposable income = Vegas baby!

    ReplyDelete
  4. GMO - Wow, must be interest in sympathy with TC.

    ATNI - Today might be a good entry from a technical standpoint?

    ReplyDelete
  5. We HAVE to get together for a Vegas dinner!!

    ReplyDelete
  6. XLE/XLF rotation working perfectly. One more day and I'm back in the energy plays.

    ReplyDelete
  7. GMO - Seems a bit frothy, I'd take 1/3 off here if I had bought a full position.

    ReplyDelete
  8. gold - Yea, let me know if you can figure out how to trade that one but the inflation trend (if that's what it is, some would say gold rally's on deflation but I don't agree) still seems upward...

    ReplyDelete
  9. CADC - Come on Patches, I'm dependin' on ya son!

    ReplyDelete
  10. Oh boy do I ever want to take the gains here and walk away for a few months...

    ReplyDelete
  11. CADC- 5th day in a row trying to get back in :)

    ReplyDelete
  12. Taking a swing at BAC > 12.65 newSubmitted by 2nd_ave (4910 comments) on Fri, 11/05/2010 - 10:52 #73586
    I like the volume behind this move, I like the fact it triggered a Buy Alert a few days ago, and I like the pitch from the vantage point of a LT move back to the high teens.

    ReplyDelete
  13. traded 30 /es contracts working off my 3min and 15min charts and my net profit (after commissions) is zero....rookie moves are killing me

    ReplyDelete
  14. ok, black now on /es $62.50 - tough way to make a living... :)

    ReplyDelete
  15. WDC - There's that message again, "The recovery isn't fast enough"

    Always behind the curve...

    ReplyDelete
  16. Intellectual property may be relatively easy to steal but theft of hard assets is considerably more difficult unless they're mispriced.

    ReplyDelete
  17. Guys - the smart move on MGM is probably to buy it when it breaks $12.50. That is the price of the most recent secondary offering. Either way, check out these earnings numbers for them over the past few years:

    2005 - $1.56/share
    2006 - $2.29/share
    2007 - $5.52/share

    Shares are now about 33% higher than before then but if they returned to $2/share earnings, that would equate to $1.35 or so a share. These casinos tend to trade at 20 to 30 times earnings. If you believe we're in the midst of a turnaround like I do, then eventually this could be a $40 stock. Just one of the many medium/big cap stocks that are undervalued in my mind.

    ReplyDelete
  18. Based on these figures, though, the best play in my mind on a turnaround in the economy is BYD. They did $1.63, $1.32 and $3.46 in 2005, 2006, and 2007. Shares haven't been diluted. So if they returned to $1.50 then it could be trading back up at $30 to $40 a share.

    ReplyDelete
  19. Vegas yea, I don't know if I could hang at the craps table with you high rollers. I will stay in my element at the sports book and penny ante poker:).

    CP: GMO I am kicking myself. I was planning on buying some if it dipped under $5.00. Stopped paying attention. Could be forming a cup and handle on a daily. Need a little push higher than a flag for a momentum type entry.

    ReplyDelete
  20. Short Squeeze to 12000? newSubmitted by 2nd_ave (4911 comments) on Fri, 11/05/2010 - 11:27 #73589
    I wouldn't rule it out. Too many traders still looking for a pullback. What if we don't get one?

    ReplyDelete
  21. Wow - great day, I even recovered my U$D losses from yesterday!

    Break out the rally monkey!

    ReplyDelete
  22. stopped out of my MGM; bought a few SPY November 12 $123 puts at $1.21 to hedge longs

    ReplyDelete
  23. Re: 1-0 v 0-1/ Dust off the plate> Back into the buy-and-hold? newSubmitted by 2nd_ave (4912 comments) on Fri, 11/05/2010 - 11:44 #73591 (in reply to #73588)
    jack- Sometimes it pays off to play the breakout. Let's face it- if this market is headed for new highs, it doesn't get there by selling off- it gets there because:

    (a) existing holders have no interest in selling, and/or
    (b) new buyers start coming in off the sidelines.

    I think both of the above are playing out as we blog. I'm actually contemplating moving the buy-and-hold half back into active duty.

    ReplyDelete
  24. Talking my book. THis one may interest you guys. BZ a paper company with a high short interest (10% as of FIN VIZ) has announced a special dividend of .40 cents. How would you like to be short a company and have to cough up 5% in the middle of a Bull Market. It is already at 52 week high. Meaning no resistance.
    Bob

    ReplyDelete
  25. jb - Your brewery could whip up a special swill and call it Rally Monkey...

    ReplyDelete
  26. 2nd - looks like it's gonna be a case of sell the news on the jobs report. maybe there are no buyers left?

    ReplyDelete
  27. RB - I don't like chasing either, it's the one rule that rings true for me if that means anything.

    ReplyDelete
  28. Oops, now the Leprechauns are getting shaken down...

    ReplyDelete
  29. Watch IRELAND

    I've been saying this for the past week or so...CDS spreads are at all time highs. AIB and IRE are crashing. I wouldn't be surprised to see a pullback here. If not just to test the most recent buyers on the breakout. I'd consider it healthy.

    ReplyDelete
  30. RB - That takes a large sack, good luck!

    ReplyDelete
  31. Ireland - Haven't we already been there and done that? The PIIGS scare was an unpleasant experience for the global economy, let's not go back there please!

    I do think Leprechauns are cute though.

    ReplyDelete
  32. GMO - There must be a support line here @ $5.30

    ReplyDelete
  33. CP: I know you like a good chuckle. This crossed my desk on the POT - Potash:

    BHP said it doesn't believe the offer would present any threat to U.S. national security and said "we don't anticipate that CFIUS review will prevent consummation of the offer." BHP however cautioned that no "assurances can be given until the review is complete."

    BHP expects the Committee on Foreign Investment in the U.S., or CFIUS, to notify the company Nov. 29 as to whether the panel intends to conclude or extend a review of the offer by another 45 days, BHP said in a company filing submitted with the Securities and Exchange Commission Friday.

    ReplyDelete
  34. Re: 1-0 v 0-1/ Dust off the plate> Back into the buy-and-hold?
    Submitted by 2nd_ave (4913 comments) on Fri, 11/05/2010 - 12:32 #73597 (in reply to #73594)
    jack- Yeah, you're probably right. It would be prudent to wait for a better entry into the broad market. I'm not as worried about BAC- it's a battered/bruised stray dog that should improve rapidly with a little TLC.

    ReplyDelete
  35. Chicken, I feel that is by far my lowest risk position. I don't know how it happened, but every thing else is levered to Oil. THis makes me very nervous. I am thinking of picking up GMO right here to diversify my portfolio. :)

    ReplyDelete
  36. CI - WTF, forgive me if I'm missing something but I don't get the association of how US national security would even be a part of the decision making process assuming we're discussing a free market transaction (insert chuckle here).

    "Potash Corporation of Saskatchewan Inc. produces and sells fertilizers and related industrial and feed products worldwide."

    ReplyDelete
  37. RB - In that case, know that the next permit meeting for GMO is scheduled for 12/9 from what I hear, the detail of which I don't know but there's liable to be some sort of announcement between then and now?

    ReplyDelete
  38. Also - in addition to the usual suspects, you might note recent action in:

    CMCLF.PK
    3993.HK
    601958.SS

    ReplyDelete
  39. Well, here is the kicker that I did not know on Potash.

    Revenues in Canada = 40%
    Revenues in USA = 60%

    Explains why they have 2 head offices. A smaller one in Canada and a larger one in Chicago.

    I am glad it is Friday. I can't take anymore of this market this week. Doesn't matter where we live, it is a nutty world. I guess that is why we have squirrels, also known as tree rats per my cousin.

    ReplyDelete
  40. 40 /es contracts, 187.50 profit. I need a break.

    ReplyDelete
  41. I always thought squirrels were cool to watch, much more interesting than rats. Push comes to shove, I'd rather eat squirrel than rat though.

    Gato Tamale?

    ReplyDelete
  42. Another potential name for JB brew: "Breast Inspector"

    ReplyDelete
  43. CP - want to start a local craft brewery, just need to get the wife to say ok; and hire a taste tester since she runs a drive ship here!

    ReplyDelete
  44. ECU.TO keeps chugging along, and so are my other positions related to PMs. I am quite happy with my results at this point and could just quit the market right here and now. Instead, I decided to buy some puts to hedge my downside risk a little. So I just bought 1 SPY January 122 put and 1 FCX December 105 put.

    ReplyDelete
  45. Adding to BAC @ 12.36. Yes, I saw the headlines just now.

    ReplyDelete
  46. NEWS ON GMO. FORM S-3 filling. Careful!!! I'm reading it.

    43M shares @ 4.77 being offered.

    ReplyDelete
  47. BAC off @ 12.33. +2.22%. R1 didn't hold. Still watching.

    ReplyDelete
  48. FCX: I just bought a 100/110 dec straddle to protect my upside and downside. Medium side not so much. :)

    ReplyDelete
  49. RB- I posted some shots of Chase the other day. Did you see them?

    ReplyDelete
  50. Mark, No I didn't. What day so i can get the link.

    ReplyDelete
  51. RB- Here you go...

    http://picasaweb.google.com/104513436728479614263/Chase?authkey=Gv1sRgCO3GmOKB0deDygE&feat=email#

    We leave today for the State Cup tourny in Sacto. Will be tough with the girls ranking.

    ReplyDelete
  52. GMO - Shelf renewal, are they gonna use this to buy out the remaining farmers?

    ReplyDelete
  53. Imbalances...

    BUY- C/BAC/MS/JPM/AA/CHK/XCO/SLB/BHI/XOM/CVX

    ReplyDelete
  54. All-in OAKBX buy-and-hold newSubmitted by 2nd_ave (4915 comments) on Fri, 11/05/2010 - 15:50 #73616 (in reply to #73598)
    'Nuff said.

    ReplyDelete
  55. Re: All-in OAKBX buy-and-hold/ DJIA 12,400 by year-end newSubmitted by 2nd_ave (4916 comments) on Fri, 11/05/2010 - 15:54 #73617 (in reply to #73616)
    That's the amygdala talking.

    ReplyDelete
  56. I guess started that fancy dancy scotch early!

    ReplyDelete
  57. I mean 2nd of coarse. I guess i will start my beer.

    ReplyDelete
  58. Well, I hope Sharkie's been raking it in...

    ReplyDelete
  59. GMO briefely the upper trend line today, woulda been a good place to unload in preparation for another entry.

    I'm such a turtle!

    ReplyDelete
  60. alright bought some more in the money calls on BYD. managed to sell my SPY puts earlier at a teeny tiny gain after i realized it was a no go on them.

    very frustrated with the recent moves in REDF but i like this one long term so i'm not going to mess around with trying to time the bottom of this pullback.

    ReplyDelete
  61. Bought BYD stock at $9.70 on pullback; bought a little LPX; bought a little SPF.

    Now back to about 90% long after going back into my index funds yesterday and reloading them.

    ReplyDelete
  62. Chickie: I never did get in GMO. The third attack on the trend line is usually the charm. What number do you see as a good buy stop (above the trend). I can see a 20 % move. Even though I don't know jack about this company.

    ReplyDelete
  63. I can't believe I just did this but I bought BAC after hours at $12.35. Why I have no idea...

    ReplyDelete
  64. RB - If GMO gets their water permit then we'll probably easily reach $10 in no time and those with longer term horizon could see low 20's following production. As moly prices rise, so will earnings...

    Right now it's all about the water.

    ReplyDelete
  65. BAC - You bought b/c it just broke free of the trend line?

    ReplyDelete
  66. "All-in OAKBX buy-and-hold"

    Ah, so THAT's why there was such a market rally into the close -- it was 2nd_ave hitting the asks! Next time you should warn us in advance about your intention of going all-in! :)

    ReplyDelete
  67. Ha, yeah I suppose your right about that!

    ReplyDelete
  68. Mark those are some impressive pics. Chase has some serious hops. The goal pics are good too. It is really hard to get a pic of a goal. Hope he gets some playing time, but it is probably tough for a freshman. Are they thinking about a red shirt or do they not do that in soccer.

    State cup comments.Sometimes a low seed is good because if you win your first game all of sudden you have a high seed. Besides it is soccer. One year Neil tied three games in a row, but won on penalty kicks. then got massacred 1-0 in the finals. One lucky kick on a windy day can be the difference.Good luck.
    Bob

    ReplyDelete
  69. RB- There are 144 teams in the tourny. They start with 3 brackets. Top bracket is 1-27, Middle bracket is 28-110, bottom bracket is 111-144.

    Kendra's team is ranked 25th in the state, so they play only the best teams. Should be fun! I've got MY travel kit all packed. All bottles and cans ;)

    ReplyDelete
  70. So you start off with the #3 team in the state(ck their birth certificates) or is there a play in game to get at the top teams.
    Bob

    ReplyDelete
  71. A quote from David Rosenberg yesterday:

    "Bottom line: While the Fed could have done more yesterday, it didn’t because the economy is doing better than expected at this juncture, even if still quite fragile."

    ReplyDelete
  72. Another quote from Rosenberg:

    "I have to admit that the news out of MasterCard SpendingPulse is amazing considering what wage growth is doing (perhaps the stimulus from strategic mortgage defaults is at play here): “retail sales showed a noticeable improvement versus a year earlier, fueled by online sales and strong demand for luxury goods, jewelry and apparel”

    ReplyDelete
  73. RB- No play in. This weekend is a round robin. I think 6 teams advance out of group 1, 3 out of group 2, and 1 out of group 3. Then it's seeded again with single elimination over the next 2 weekends. I don't expect us to advance. Some teams draw players from huge areas. No need to check ID's. I already KNOW their older :)....

    ReplyDelete
  74. Ah group play. I love listening to parents try and figure out the point system. I stopped trying to help. Why ruin their fun? Also the worst thing you could tell a soccer team, "All you need is a tie to advance."
    Bob

    ReplyDelete