Bulls probably had a hard time sleeping last week, wondering how much longer indexes could rise without a pullback. Friday's sell-off + tonight's headlines may be the sedative they've been waiting for. I think they rest easy tonight.
If the US is printing all the money, why is food inflation hitting these other countries so hard? If we really have a global market, why isn't it hitting all of us hard?
BTW, the mother of all blizzards may be hitting Illinois starting tomorrow and continuing during week. St. Louis hit by freezing rain first followed by snow which will extend up to Chicago and beyond. Up to 18 inches in northern IL. It's a one-two punch with a system from Arkansas mixing with one from northwest.
Looking at a monthly chart for WTI. The current price is $89.94. On the previous run up it hit $89.94 in Oct07 and the top price of $147.27 was in Jul08.
Brent is currently $99.73 and it first hit that price in Feb08. It hit a high of $147.50 in Jul08 as well.
The monthly chart for Brent today looks a lot like it did in Feb08, right before it's parabolic rise. Hmmmm.
Port, see CP's thingy from MS yesterday which may explain how the excess dollars are showing up in EM, especially China. Only a matter of time before it translates to USA.
We're wearing shorts and tshirts in Texas. I bought UNG on Friday at $5.83 and I'm hoping for what I think will be another run up before we trade back down. I have a pretty tight GOOD TILL CANCELLED stop on this so I don't sell these shares to David later $.70 cheaper.
Mark, if you meant CP....I thought he was like in Virginia or somewhere there abouts. ??? Maybe he really watches the weather well ahead because of all those fowl?
Guys the more I think about it...rising input prices and wage inflation is causing China goods to become more and more expensive. Some of my suppliers are jacking up prices by 30% or more.
This might just cause manufacturing to at least temporarily shift to US sources (and eventually to sources like Vietnam). If the US benefits from this, I think it will catch a lot of long term U.S. bears off guard and we could truly be in the beginning of a long term bull market. At the margin, it could be beneficial to our country. There are thousands of businesses just like mine that are wholesalers buying goods from Chinese importers and are looking for alternative sources because their product costs are rising.
Inflation...I normally don't pay for these things, but I was surprised to pay $44 for 2 large pizza's for the kids. You all know I don't eat that crap.
OK, time for a panic attack. I need to remember to BREATH when I read these things
"Moreover, central bankers have for some time repeated that they, and we, face an unusual level of ‘Knightian uncertainty' - a type of uncertainty for which there is no underlying probability distribution. To be proactive, central bankers need a reasonable degree of certainty as to the economic forces at work and their eventual effect on inflation. Without such reasonable certainty, they may be condemned to being reactive and thus wait until the fog dissipates before they act in a meaningful manner"
Got it. CP/CB confusion. BTW, I may be willing to pay $22 for a delivered pizza later this week. But then again, like you I guess, I don't eat pizza much. I have plenty of canned sardines.
That MS report on how the Fed's QE is exporting inflation is not the first one I have read. The round trip scenario makes sense to me. Inflation ends up at Wall-Mart, inevitably.
MS article - I still believe China is in a very good position here, low debt provides a wide window in which to maneuver.
Inflation of foreign made goods imported to the US will assist the jobs creation process in the US and as Ben says, commodities inflation is a self-regulating mechanism.
Yes, I believe Ben has purposely exported inflation to Asian countries in attempt to break/weaken their currency pegs.
Suffice it to say I think Ben's got a much better handle on where we're headed than he receives credit for.
The Chinese people actually seem content with communist party rule as long as the communist party continues to pursue an increasing living standard. (This is where many dictatorships run into trouble. ie: Egypt, for instance)
I'll happily report that chickie spirits were no longer fowl today, splashing and running around like spring chickens since their predator foe finally flew the coop.
"Sharp Spending Increases Hurt Inventory Calculations This sharp acceleration in spending caused inventories to grow much more slowly than sales. Some of the inventory issue was because production couldn't keep pace with demand, forcing inventory/sales ratios down to unsustainably low levels. Another portion came from the importation and storage of a lot of foreign goods during the first three quarters of the year. Those goods were shipped from inventory in the fourth quarter. Shipments out of inventory do not count in the GDP calculation. Remember that the "P" in "GDP" stands for production, not inventory drawdowns. The rather obtuse inventory adjustment reduced GDP a stunning 3.7%. It is important to note that inventories were not at a very high level to begin with. Some of those inventories will need to be replenished in 2011.
But the Inventory Issues Are Partially Explained by Falling Imports It is tempting to say GDP growth would have been 6.9% without the inventory adjustment, which is mathematically true. However, there is an interaction between imports and inventories that would make this a less-than-honest assessment. Earlier in the year, there was an unusually high amount of imports, some of which probably ended up in inventory, awaiting the holiday sales period. In the fourth quarter imports were much lower than they would have normally been. Like inventories, imports are a subtraction from GDP because they represent goods not produced here. Falling imports added a remarkable 2.4% to GDP. Combining the inventory and import-related over-reactions, I suspect that the GDP growth tendency for the fourth quarter was just over 4% versus the 3.2% reported."
I can vouch for Mark's quotes on pizza. Between soccer parties and birthdays, the parents in my group all know it's about 20 bucks for a large- it almost doesn't matter where you go.
Re: Vonnegut newSubmitted by 2nd_ave (5193 comments) on Mon, 01/31/2011 - 08:58 #78639 (in reply to #78636) BH- Reading Vonnegut and Heller while growing up explains much of our generational philosophy:
"Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them. With Major Major it had been all three. Even among men lacking all distinction he inevitably stood out as a man lacking more distinction than all the rest, and people who met him were always impressed by how unimpressive he was."
"Let's take a drive into the middle of nowhere with a pack of Marlboro lights and talk about our lives."
Mark - I was wondering that too (RE: MEE) and my first thought was maybe it wasn't going to go through. Either way (deal goes through or not) and ANR goes up in my mind.
Mark - I think we're being a little dense this morning as to why MEE is down:
"•Under the terms of the agreement, Massey stockholders will receive, at the closing, 1.025 shares of Alpha common stock and $10.00 in cash for each share of Massey common stock. "
Max frustration? Probably +100 DJIA at the close newSubmitted by 2nd_ave (5195 comments) on Mon, 01/31/2011 - 11:22 #78663 Leaving investors who made preparations over the weekend to board on a major gap-down stranded. Along with those who disembarked last Friday.
Re: CSCO- To 60% of allocation @ 20.88 newSubmitted by 2nd_ave (5196 comments) on Mon, 01/31/2011 - 11:35 #78667 (in reply to #78653) Kim- I would wager at least one fund partially sold off holdings this morning in order to build a larger position at the morning lows. My opinion is based on nothing more than the fact that given the means, I would have done the same.
Back before Al Gore invented the Internet, I had a Prodigy account. I would tool around the stock boards there---reading every post as if it were gospel. I became friendly with a very confident older gentleman. Every day he would tout a stock. He bought--or at least he said he bought--the stock daily. I was so impressed with his enthusiasm that I too began buying the stock--as much as I could afford.
Of course, what happened next is classic. The stock tanked. I called this guy to find out WTF (why the failure). As I was freaking out, I'll never forget what he said. In a very calm gentlemanly like voice "Dave, no one rings a bell for us when a market has topped."
It was a very expensive lesson for me but worth every penny. It made me realize that no one really knows exactly a market is headed, not even a confident gentleman.
Over the weekend, I got quite a few emails asking if this was "the" top. I don't think so. I think it's one bad down day blamed on world events. Don't get me wrong, it was ugly but so far, the market only gave back a week or so of gains.
I don't think a top is not going to be so obvious and could be blamed on a world event. Yes, things are not great for the Egyptians but I don't think it's the catalyst for our next bear market (BTW, I ignore ALL news).
No one is going to ring a bell to let you know it's here.
So, when will I turn bearish? Well, like Justice Potter Smith, I think I'll know it when I see it. If I see the market and numerous sectors breaking down and forming transitional patterns (Bowties, Gatekeepers, First Thrust, First Kiss After Daylight, Reversal Gaps, etc.) then I might start getting concerned.
For now, I'm going to honor my stops on existing positions just in case and wait for entries on new ones.
Re: gold this am Submitted by 2nd_ave (5198 comments) on Mon, 01/31/2011 - 12:13 #78673 (in reply to #78670) Too early for scotch.
Grym- As they say, scotch doesn't know what time it is. It's funny how social etiquette necessitated the invention of the Bloody Mary, or the champagne brunch. I've always found the best time for scotch is when 'I need a drink.'
Re: american home ownership newSubmitted by 2nd_ave (5198 comments) on Mon, 01/31/2011 - 12:18 #78674 (in reply to #78671) What that tells me is that 2/3 of households are able to afford a home. Personally, that sounds about right. Americans are entitled to 'life, liberty, and the pursuit of happiness.' Whether or not they can afford a car, a home, or a yacht pretty much hinges on more than US citizenship.
I woke up, saw that the market, instead of collapsing further, has rebounded, saw that VXX has miraculously declined only a little, imaged what would happen to VXX if VIX drops back to 16 (a 20% decline) and realized that this might be my last chance to exit VXX before my losses become very large. And so I sold all my 1500 shares of VXX at $31.70. All together, including the trading gains I had on VXX, my total loss from starting to scale into VXX at $35 was about 0.6% of my port. I am glad I cut my loss before it became 6% of my port...
The other reason for cutting VXX now was that I can place a buy stop order above this mornings high (which I am sure won't be exceeded today) and buy VXX for an intraday trade if the market starts declining tomorrow once again. However, the history of my previous observations of VIX futures suggests that VXX will be gapping down and staying down every day unless the market starts collapsing again.
Also, yesterday I was looking at the charts of WATG/CAAS/SORL, which are all in a clear down trend now, and decided to sell 1000 shares of WATG for which I wasn't able to sell a $7.50 covered call at $0.5. I placed a sell limit order at $7.30 and 800 shares were filled so far. I acquired these shares after selling a $7.50 put for $0.85, and so if all 1000 shares will be sold at $7.30, then I will have made $650 on these shares. So my thinking is that I would rather reduce my WATG position while I still have some gain in the additional shares that were assigned to me during the January OpEx. I was actually assigned 2000 shares, but I was able to sell a $7.50 covered call for 1000 of them, reducing my cost basis to $6.25, and I figured I will hold these shares until February OpEx and see what happens.
The market is extremely resilient and after seeing the PMI print and looking over the past month's worth of econ reports, there is absolutely no reason to be short this market. Yes, margins are at highs, but the majority of this market looks or reads about valuation relative to earnings and based on that metric alone we're at a 13 p/e. Throw in the usual argument from perma bulls regarding interest rates and when coupled with clearly strengthening/strong econ reports, why would anyone want to short the market for more than a quick scalp?
I noticed there is a clear premium in weekly SPY options tilted toward calls...Just now the SPY was at $128.5. At that time, the $126 Calls ($2.5 in the money) were trading at $2.88 while the $131 Puts ($2.5 in the money) were trading at $2.60. That tells me the majority of the options market thinks we're heading higher this week.
Finally, this morning I got stopped out of my FCX short at $108, at the same price at which I entered it. With copper futures at all-time high now, there is little reason to short FCX now.
The remaining 200 shares of WATG were just sold for me at $7.30. So I have just booked a $650 profit on these 1000 shares.
Another reason for reducing my WATG position now was a realization that SORL has declined almost as much as WATG over the past year and over the past 6 months, but unlike WATG, SORL has almost no debt and has no large "intangible" assets on its balance sheet. So on any further weakness in the sector, I will sell $7.50 puts on SORL.
I also decided to close my February $126 SPY put and two March $125 SPY puts while VIX is still above 19 and they are still worth something. So now my downside protection consists only of 4 IWM February $78 puts and 1000 shares of TWM.
Given that my biggest long positions, ECU and WATG, have already declined a lot and probably don't have much downside left, I don't think I need to keep too many index puts around to protect my downside, and so I like my portfolio as it is now.
At this point, I think it will be much easier to profit in 2011 by playing GDXJ than by shorting the broad market, and so I am focusing my efforts now on playing GDXJ smartly. I have just placed a buy stop limit order at $35.20 (just above the recent highs) for 200 shares of GDXJ, so as to enter on the way up if the recent decline is over.
Now that I've closed a big bunch of my shorts and became net long once again, all is clear for a sharp market correction -- I am always the last one to give in. This is a fair warning to you guys. :)
Thanks, CP, for bringing GMO to our attention once again. Its chart now definitely looks like many of the weak hands were shaken out of it recently, and so I just bought 1000 shares at $5.12 as a long-term hold. If it drops below $5, I'll sell $5 puts on it.
Keep an eye on RAS guys. There are some pretty big sell orders right now. I'm wondering if it is margin related. Could get ugly. There was some insider selling that posted on Friday @ 2.70 ish on the 26th, but they were small and were tax related.
Molybdenum is currently ~$17 and the historical coefficient(pre-financial crisis) for GMO has been Mo/2.6 Therefore, a linear extrapolation would place the current share price somewhere around $6.54
Coincidentally, $6.54 would place the share price squarely on the lower trend line of the channel that GMO was recently trading in.
Re: guess this is about the time/ Contrave newSubmitted by 2nd_ave (5200 comments) on Mon, 01/31/2011 - 15:39 #78694 (in reply to #78690) baz22/earl- Thanks for bringing this one to my attention. Not the first time an unintended effect of one drug was exploited for use in treating an unrelated condition (note the success of Propecia following the introduction of Proscar).
The combination of bupropion/naltrexone looks promising. Hope to see OREX take off. Good luck.
Added a little more RAS at $2.54. I have a bunch of 401k money coming free tomorrow that I will be using to buy RAS. I think the $2.40s to $2.50 level is a great buyin point.
Mark - Large volume spike went through on RAS right at the lows of the day. My first take is that they are trading this purely on technicals right now.
INTC> closed flat newSubmitted by 2nd_ave (5202 comments) on Mon, 01/31/2011 - 16:03 #78701 One sign undervalued large-cap technology stocks may outperform this year.
NVLS +4% in extended hours newSubmitted by 2nd_ave (5203 comments) on Mon, 01/31/2011 - 16:12 #78705 Misses on earnings (0.89 v 0.94), but beats on revenue. Earnings for this sector continue to rock.
2nd - speaking of large caps (not necessarily tech ones) take a look at BBY. I find it hard to imagine that this one doesn't rebound at some point this year. Company is trading at 10 times trailing earnings and 9 times trailing annual cash flows.
Mark - You want to hear something really pathetic? I kid you not I had a dream over the weekend that I watched RAS shoot up to $5 per share while I was waiting for my money to free up in my 401k (which happens on Tuesday). It was a pretty realistic dream...I was watching it on my streamer and saw it gap up to $2.95 with a huge order, then it steadied and just ran up almost 100% all while I wasn't in it. How sad is it to have a dream like that?
RE: REDF > if any of you guys are tempted to get into this crappy company, it's back at prior resistance around $6. Someone out there is making a killing off of these moves in this stock.
Re: american home ownership Submitted by Vadym Graifer (1735 comments) on Mon, 01/31/2011 - 16:03 #78702 (in reply to #78695) As Vad has said in his flawless Russo-English, "lower can always go lowerer."
Hey, ever since I mastered English betterer, my version went furtherer:
Oversold gets oversolder until it becomes oversoldest, and then it sells some more.
Re: american home ownership newSubmitted by 2nd_ave (5204 comments) on Mon, 01/31/2011 - 16:28 #78707 (in reply to #78702) Oversold gets oversolder until it becomes oversoldest, and then it sells some more.
Mark - My 401k is with some annoying ING brokerage that charges astronomical commissions and only allows you to buy blocks of a max of 5000 shares at a time online. It totally sucks but it's the only thing my company offers. We used to have Schwab and there weren't any restrictions like this.
EGPT anyone?...Bueller....Bueller...
ReplyDeleteI feel like I spend every weekend in the county jail, waiting for the markets to reopen each Monday.
ReplyDeleteES +0.50.
ReplyDeleteMark's comments get more esoteric every week.
ReplyDeleteSo why did Cargill sell their stake in MOS?
ReplyDeletehttp://finance.yahoo.com/news/Are-Insiders-Picking-a-2011-minyanville-169762650.html
Haven't heard a thing from Cheapy for a while. Was the one-two punch of (IL)income tax increase and PM falling a knockout? Hope not.
ReplyDeleteIf the US is printing all the money, why is food inflation hitting these other countries so hard? If we really have a global market, why isn't it hitting all of us hard?
ReplyDeleteES + 2.50. I guess it's up to EU...Thanks 2nd. I'll really start to worry when 'esoteric' is replaced with 'stupid'!
ReplyDeleteBTW, the mother of all blizzards may be hitting Illinois starting tomorrow and continuing during week. St. Louis hit by freezing rain first followed by snow which will extend up to Chicago and beyond. Up to 18 inches in northern IL. It's a one-two punch with a system from Arkansas mixing with one from northwest.
ReplyDeleteLooking at a monthly chart for WTI. The current price is $89.94. On the previous run up it hit $89.94 in Oct07 and the top price of $147.27 was in Jul08.
ReplyDeleteBrent is currently $99.73 and it first hit that price in Feb08. It hit a high of $147.50 in Jul08 as well.
The monthly chart for Brent today looks a lot like it did in Feb08, right before it's parabolic rise. Hmmmm.
Illini- CB gave us the heads up he is hunkering down during the storm.
ReplyDeletePort, see CP's thingy from MS yesterday which may explain how the excess dollars are showing up in EM, especially China. Only a matter of time before it translates to USA.
ReplyDeleteport- Do you have any data on Jet-A fuel? I had an interesting conversation with X+3B today in this area.
ReplyDeleteWe're wearing shorts and tshirts in Texas. I bought UNG on Friday at $5.83 and I'm hoping for what I think will be another run up before we trade back down. I have a pretty tight GOOD TILL CANCELLED stop on this so I don't sell these shares to David later $.70 cheaper.
ReplyDeleteMark, if you meant CP....I thought he was like in Virginia or somewhere there abouts. ??? Maybe he really watches the weather well ahead because of all those fowl?
ReplyDeleteGuys the more I think about it...rising input prices and wage inflation is causing China goods to become more and more expensive. Some of my suppliers are jacking up prices by 30% or more.
ReplyDeleteThis might just cause manufacturing to at least temporarily shift to US sources (and eventually to sources like Vietnam). If the US benefits from this, I think it will catch a lot of long term U.S. bears off guard and we could truly be in the beginning of a long term bull market. At the margin, it could be beneficial to our country. There are thousands of businesses just like mine that are wholesalers buying goods from Chinese importers and are looking for alternative sources because their product costs are rising.
Inflation...I normally don't pay for these things, but I was surprised to pay $44 for 2 large pizza's for the kids. You all know I don't eat that crap.
ReplyDeleteAhh I missed that, thx.
ReplyDeleteOK, time for a panic attack. I need to remember to BREATH when I read these things
"Moreover, central bankers have for some time repeated that they, and we, face an unusual level of ‘Knightian uncertainty' - a type of uncertainty for which there is no underlying probability distribution. To be proactive, central bankers need a reasonable degree of certainty as to the economic forces at work and their eventual effect on inflation. Without such reasonable certainty, they may be condemned to being reactive and thus wait until the fog dissipates before they act in a meaningful manner"
Illini- No, I meant Cheapy (CB). Hunkering down in the PM storm. CP is busy putting sweater vests on his chickies. Sad, but true. :)
ReplyDeleteMark, thats 2x the price in midwest. What did it have on it, lobster?
ReplyDeleteport- Be careful with UNG! You just might sell those babies to David on an opening gap that turns you order into a market order :)
ReplyDeleteGot it. CP/CB confusion. BTW, I may be willing to pay $22 for a delivered pizza later this week. But then again, like you I guess, I don't eat pizza much. I have plenty of canned sardines.
ReplyDeleteOne large cheese, one large peperoni. But my "house" is worth 3.8M and the driver is paid $75/hour :)!
ReplyDeleteMaybe you can get it cheaper from Oakland. Too far away probably.
ReplyDeleteExcellent MS article. Hyperinflation here we come. I wonder how many countries hate what the Fed is doing?
ReplyDeleteMark, nothing on Jet A fuel.
If anyone gets my UNG at a discount I hope its David and I hope he makes a bunch of dough off of it.
RB should be a free bird by know. Maybe he cut in line at chow and got an extra day. Damn, he should know better being a 4 timer.
ReplyDeleteport- Look into it if you can. I'll post X+3B's take when I can sort it out and run it by MOG. Kinda interesting thought.
ReplyDeleteWill do. Everyone get out an buy some natty so for once I can sell my UNG at a profit.
ReplyDeleteg'nite
That MS report on how the Fed's QE is exporting inflation is not the first one I have read. The round trip scenario makes sense to me. Inflation ends up at Wall-Mart, inevitably.
ReplyDeleteMS article - I still believe China is in a very good position here, low debt provides a wide window in which to maneuver.
ReplyDeleteInflation of foreign made goods imported to the US will assist the jobs creation process in the US and as Ben says, commodities inflation is a self-regulating mechanism.
Yes, I believe Ben has purposely exported inflation to Asian countries in attempt to break/weaken their currency pegs.
Suffice it to say I think Ben's got a much better handle on where we're headed than he receives credit for.
The Chinese people actually seem content with communist party rule as long as the communist party continues to pursue an increasing living standard. (This is where many dictatorships run into trouble. ie: Egypt, for instance)
I'll happily report that chickie spirits were no longer fowl today, splashing and running around like spring chickens since their predator foe finally flew the coop.
ReplyDelete"Inflation ends up at Wall-Mart, inevitably"
ReplyDeleteExactly, I won't lose much sleep should products made by 7yr olds for 7 yr olds become more expensive.
Interesting take from Morningstar on the GDP report:
ReplyDeletehttp://news.morningstar.com/articlenet/article.aspx?id=368182&part=2
"Sharp Spending Increases Hurt Inventory Calculations
This sharp acceleration in spending caused inventories to grow much more slowly than sales. Some of the inventory issue was because production couldn't keep pace with demand, forcing inventory/sales ratios down to unsustainably low levels. Another portion came from the importation and storage of a lot of foreign goods during the first three quarters of the year. Those goods were shipped from inventory in the fourth quarter. Shipments out of inventory do not count in the GDP calculation. Remember that the "P" in "GDP" stands for production, not inventory drawdowns. The rather obtuse inventory adjustment reduced GDP a stunning 3.7%. It is important to note that inventories were not at a very high level to begin with. Some of those inventories will need to be replenished in 2011.
But the Inventory Issues Are Partially Explained by Falling Imports
It is tempting to say GDP growth would have been 6.9% without the inventory adjustment, which is mathematically true. However, there is an interaction between imports and inventories that would make this a less-than-honest assessment. Earlier in the year, there was an unusually high amount of imports, some of which probably ended up in inventory, awaiting the holiday sales period. In the fourth quarter imports were much lower than they would have normally been. Like inventories, imports are a subtraction from GDP because they represent goods not produced here. Falling imports added a remarkable 2.4% to GDP. Combining the inventory and import-related over-reactions, I suspect that the GDP growth tendency for the fourth quarter was just over 4% versus the 3.2% reported."
BGZ Sell order
ReplyDeleteI put an order to sell at all of my BGZ tomorrow at market. Hopefully we see a gap down that will allow me to sell at a nice 2% pop.
I can vouch for Mark's quotes on pizza. Between soccer parties and birthdays, the parents in my group all know it's about 20 bucks for a large- it almost doesn't matter where you go.
ReplyDeleteRe: Vonnegut newSubmitted by 2nd_ave (5193 comments) on Mon, 01/31/2011 - 08:58 #78639 (in reply to #78636)
ReplyDeleteBH- Reading Vonnegut and Heller while growing up explains much of our generational philosophy:
"Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them. With Major Major it had been all three. Even among men lacking all distinction he inevitably stood out as a man lacking more distinction than all the rest, and people who met him were always impressed by how unimpressive he was."
"Let's take a drive into the middle of nowhere with a pack of Marlboro lights and talk about our lives."
-Joseph Heller
It looks like it is all about the finanCOALS. this morning. Mark thanks for the heads up.
ReplyDeleteSold all of my BTU Feb $60 calls just now at $3.5 that I bought on Friday at $2.7 average. Sold my BTU at $62.55 that I bought at $61.5 avg.
ReplyDeleteCSCO- To 60% of allocation @ 20.88 newSubmitted by 2nd_ave (5194 comments) on Mon, 01/31/2011 - 09:38 #78649
ReplyDeleteI think we see CSCO at 25 by June.
Long ANR at 53.62.
ReplyDeleteAdded to ANR at $53.51 earlier and now have a very large position in it. I think the weakness in the stock gets bought up all day long.
ReplyDeleteIS INTC HALTED? no movement.
ReplyDeleteINTC- Yes, halted.
ReplyDeleteANR- I thought about that one too. I wonder why MEE is trading about 6 bucks below the offer price.
http://blogs.barrons.com/techtraderdaily/2011/01/31/intel-shares-halted-for-news/?mod=yahoobarrons
ReplyDeleteINTC- Bad chip, giving revised guidance/margin contraction.
ReplyDeletePM's/Miners not so happy.
ReplyDeleteMMR? I guess traders are looking for anything slightly oversold in the oil patch. Good comments from PXP today.
ReplyDeleteMark - I was wondering that too (RE: MEE) and my first thought was maybe it wasn't going to go through. Either way (deal goes through or not) and ANR goes up in my mind.
ReplyDeleteAdded to ANR at $53.88
ReplyDeleteGood ol' Intel!
ReplyDeleteBidding GMO @ 4.94.
ReplyDeleteTOF- Hmmm. My thought also.
OK, I'll see if I can get lucky. Bidding ANR @ 52.59.
ReplyDeleteAt the close amigos.
ReplyDeleteLooks like Cara sold his PM position.
ReplyDeletehttp://www.raymondjames.com/images/inv_strat/110131_1lg.gif
ReplyDeleteCP- You're basing that opinion on the 'time to be out of the water' comment?
ReplyDeleteMark - I think we're being a little dense this morning as to why MEE is down:
ReplyDelete"•Under the terms of the agreement, Massey stockholders will receive, at the closing, 1.025 shares of Alpha common stock and $10.00 in cash for each share of Massey common stock. "
If ANR is down then MEE is down.
Max frustration? Probably +100 DJIA at the close newSubmitted by 2nd_ave (5195 comments) on Mon, 01/31/2011 - 11:22 #78663
ReplyDeleteLeaving investors who made preparations over the weekend to board on a major gap-down stranded. Along with those who disembarked last Friday.
2nd - Yes, "Time to be out of the water" I suppose that indicates he's all in cash now.
ReplyDeleteNot necessarily. It can actually mean anything one wants it to mean ;)
ReplyDeleteI'm still holding GMO/CADC/ABX with an eye to buy.
ReplyDeleteCADC is my buy preference but my dilema is it's already a large position and I don't want to increase my basis....
Damn, just missed the window! Never mind...
Re: CSCO- To 60% of allocation @ 20.88 newSubmitted by 2nd_ave (5196 comments) on Mon, 01/31/2011 - 11:35 #78667 (in reply to #78653)
ReplyDeleteKim- I would wager at least one fund partially sold off holdings this morning in order to build a larger position at the morning lows. My opinion is based on nothing more than the fact that given the means, I would have done the same.
As if on cue, CSCO bounced from 20.82 to 20.99 in the past 20 minutes.
ReplyDeleteIllini - Say it's not snow! The wind knocked on my door this morning and asked: "Wanna get lucky, little boy?" I promptly closed the door in her face.
ReplyDelete"It can actually mean anything one wants it to mean"
ReplyDeleteYeah, maybe he's toweling off. How creepy is that image?
Landry-
ReplyDeleteRandom Thoughts:
Back before Al Gore invented the Internet, I had a Prodigy account.
I would tool around the stock boards there---reading every post as
if it were gospel. I became friendly with a very confident older
gentleman. Every day he would tout a stock. He bought--or at least
he said he bought--the stock daily. I was so impressed with his
enthusiasm that I too began buying the stock--as much as I could
afford.
Of course, what happened next is classic. The stock tanked. I
called this guy to find out WTF (why the failure). As I was
freaking out, I'll never forget what he said. In a very calm
gentlemanly like voice "Dave, no one rings a bell for us when a
market has topped."
It was a very expensive lesson for me but worth every penny. It
made me realize that no one really knows exactly a market is
headed, not even a confident gentleman.
Over the weekend, I got quite a few emails asking if this was "the"
top. I don't think so. I think it's one bad down day blamed on
world events. Don't get me wrong, it was ugly but so far, the
market only gave back a week or so of gains.
I don't think a top is not going to be so obvious and could be
blamed on a world event. Yes, things are not great for the
Egyptians but I don't think it's the catalyst for our next bear
market (BTW, I ignore ALL news).
No one is going to ring a bell to let you know it's here.
So, when will I turn bearish? Well, like Justice Potter Smith, I
think I'll know it when I see it. If I see the market and numerous
sectors breaking down and forming transitional patterns (Bowties,
Gatekeepers, First Thrust, First Kiss After Daylight, Reversal
Gaps, etc.) then I might start getting concerned.
For now, I'm going to honor my stops on existing positions just in
case and wait for entries on new ones.
We're not at a top. In my mind that doesn't preclude a deep pullback.
ReplyDeletePicked up GDXJ 34.55
ReplyDeletePicked up UNG 5.90
ReplyDeleteRe: gold this am
ReplyDeleteSubmitted by 2nd_ave (5198 comments) on Mon, 01/31/2011 - 12:13 #78673 (in reply to #78670)
Too early for scotch.
Grym- As they say, scotch doesn't know what time it is. It's funny how social etiquette necessitated the invention of the Bloody Mary, or the champagne brunch. I've always found the best time for scotch is when 'I need a drink.'
Re: american home ownership newSubmitted by 2nd_ave (5198 comments) on Mon, 01/31/2011 - 12:18 #78674 (in reply to #78671)
ReplyDeleteWhat that tells me is that 2/3 of households are able to afford a home. Personally, that sounds about right. Americans are entitled to 'life, liberty, and the pursuit of happiness.' Whether or not they can afford a car, a home, or a yacht pretty much hinges on more than US citizenship.
CLNE - When will that sucker ever stop falling?
ReplyDeleteINTC - It's an extremely complex business, the details will always do their best to trip you up.
ReplyDeleteSounds like a metal migration issue, I bet device engineering tried to blame the problem on manufacturing.
INTC investors seem to be taking it in stride.
ReplyDeleteEgypt - I root for the people protesting for their rights.
ReplyDeleteINTC - Yeah, it's a difficult call from my perspective, not a show stopper though.
ReplyDeleteClosed out my ANR at $53.33
ReplyDeleteMDW - I've been wondering how much fuel that rocket has...
ReplyDeleteBA - WTO rules BA received illegal subsidies? I guess they beat Assange to the punch!
ReplyDeleteIt hasn't started snowing here yet but when it does later this afternoon it wont stop till Wednesday night at which time the temp goes to 8 below.
ReplyDeleteBought some STVI today at $1.84ish average.
ReplyDeleteOut of the widow maker for a 4 cent loss:(
ReplyDeleteOut GDXJ even. No reason. I've been watching the tape and it just doesn't look "normal" to me.
ReplyDeleteI woke up, saw that the market, instead of collapsing further, has rebounded, saw that VXX has miraculously declined only a little, imaged what would happen to VXX if VIX drops back to 16 (a 20% decline) and realized that this might be my last chance to exit VXX before my losses become very large. And so I sold all my 1500 shares of VXX at $31.70. All together, including the trading gains I had on VXX, my total loss from starting to scale into VXX at $35 was about 0.6% of my port. I am glad I cut my loss before it became 6% of my port...
ReplyDeleteThe other reason for cutting VXX now was that I can place a buy stop order above this mornings high (which I am sure won't be exceeded today) and buy VXX for an intraday trade if the market starts declining tomorrow once again. However, the history of my previous observations of VIX futures suggests that VXX will be gapping down and staying down every day unless the market starts collapsing again.
Also, yesterday I was looking at the charts of WATG/CAAS/SORL, which are all in a clear down trend now, and decided to sell 1000 shares of WATG for which I wasn't able to sell a $7.50 covered call at $0.5. I placed a sell limit order at $7.30 and 800 shares were filled so far. I acquired these shares after selling a $7.50 put for $0.85, and so if all 1000 shares will be sold at $7.30, then I will have made $650 on these shares. So my thinking is that I would rather reduce my WATG position while I still have some gain in the additional shares that were assigned to me during the January OpEx. I was actually assigned 2000 shares, but I was able to sell a $7.50 covered call for 1000 of them, reducing my cost basis to $6.25, and I figured I will hold these shares until February OpEx and see what happens.
ReplyDeleteThe market is extremely resilient and after seeing the PMI print and looking over the past month's worth of econ reports, there is absolutely no reason to be short this market. Yes, margins are at highs, but the majority of this market looks or reads about valuation relative to earnings and based on that metric alone we're at a 13 p/e. Throw in the usual argument from perma bulls regarding interest rates and when coupled with clearly strengthening/strong econ reports, why would anyone want to short the market for more than a quick scalp?
ReplyDeleteI noticed there is a clear premium in weekly SPY options tilted toward calls...Just now the SPY was at $128.5. At that time, the $126 Calls ($2.5 in the money) were trading at $2.88 while the $131 Puts ($2.5 in the money) were trading at $2.60. That tells me the majority of the options market thinks we're heading higher this week.
ReplyDeleteFinally, this morning I got stopped out of my FCX short at $108, at the same price at which I entered it. With copper futures at all-time high now, there is little reason to short FCX now.
ReplyDeleteI guess if you're a contrarian you would take that as a reason to short but I don't think there is much reason to do that right now...
ReplyDeleteSeeing this I decided to buy some Feb 08 $126 SPY Calls at $2.96.
ReplyDeleteSold my STVI at $1.90...I'll take the 3% gain.
ReplyDeleteThe remaining 200 shares of WATG were just sold for me at $7.30. So I have just booked a $650 profit on these 1000 shares.
ReplyDeleteAnother reason for reducing my WATG position now was a realization that SORL has declined almost as much as WATG over the past year and over the past 6 months, but unlike WATG, SORL has almost no debt and has no large "intangible" assets on its balance sheet. So on any further weakness in the sector, I will sell $7.50 puts on SORL.
I also decided to close my February $126 SPY put and two March $125 SPY puts while VIX is still above 19 and they are still worth something. So now my downside protection consists only of 4 IWM February $78 puts and 1000 shares of TWM.
ReplyDeleteGiven that my biggest long positions, ECU and WATG, have already declined a lot and probably don't have much downside left, I don't think I need to keep too many index puts around to protect my downside, and so I like my portfolio as it is now.
TOF- Do you have any idea when the share exchange will take place? I'm assuming it will be months.
ReplyDeleteAt this point, I think it will be much easier to profit in 2011 by playing GDXJ than by shorting the broad market, and so I am focusing my efforts now on playing GDXJ smartly. I have just placed a buy stop limit order at $35.20 (just above the recent highs) for 200 shares of GDXJ, so as to enter on the way up if the recent decline is over.
ReplyDeleteyeah i'm assuming it will take a while Mark.
ReplyDeleteCopper vs gold divergence widens:
ReplyDeletehttp://4.bp.blogspot.com/_YJ9lCQZp67c/TUbIKompDdI/AAAAAAAACug/WiUdVR67D3Y/s1600/Cu%2Bvs%2B%2BAu%2BP-Phase%2B%252801-28-11%2529%2B660W.jpg
And I'm out of the SPY calls. Brilliant call by me.
ReplyDeleteNow that I've closed a big bunch of my shorts and became net long once again, all is clear for a sharp market correction -- I am always the last one to give in. This is a fair warning to you guys. :)
ReplyDeleteJNJ just in the last few minutes is in a steep dive from an altitude of 59.92 to 59.75.
ReplyDeleteGMO gonna make it to $8+ this year? I think it's a high probability if this forecast is accurate:
ReplyDeleteMOLYBDENUM FOCUS - Molybdenum to average $21.75/lb in 2011 - CPM Group
http://www.minormetals.com/scoop/?id=28978&v=0&lang=en&cid=131228&type=1
SLW/UXG/RBY in trouble....But so is the overall market, or so it appears. Traders obviously still reducing risk.
ReplyDelete"all is clear for a sharp market correction"
ReplyDeleteNo doubt it starts with GDXJ! ;)
Hmmm...Bouncing a little here.
ReplyDeleteTake a look at CPE.
ReplyDeleteThanks, CP, for bringing GMO to our attention once again. Its chart now definitely looks like many of the weak hands were shaken out of it recently, and so I just bought 1000 shares at $5.12 as a long-term hold. If it drops below $5, I'll sell $5 puts on it.
ReplyDeleteKeep an eye on RAS guys. There are some pretty big sell orders right now. I'm wondering if it is margin related. Could get ugly. There was some insider selling that posted on Friday @ 2.70 ish on the 26th, but they were small and were tax related.
ReplyDeleteRAS- Now they are gone. Maybe the MM is playing games.
ReplyDeleteS2 for RBY is 4.63.
ReplyDeleteMolybdenum is currently ~$17 and the historical coefficient(pre-financial crisis) for GMO has been Mo/2.6 Therefore, a linear extrapolation would place the current share price somewhere around $6.54
ReplyDeleteCoincidentally, $6.54 would place the share price squarely on the lower trend line of the channel that GMO was recently trading in.
Re: guess this is about the time/ Contrave newSubmitted by 2nd_ave (5200 comments) on Mon, 01/31/2011 - 15:39 #78694 (in reply to #78690)
ReplyDeletebaz22/earl- Thanks for bringing this one to my attention. Not the first time an unintended effect of one drug was exploited for use in treating an unrelated condition (note the success of Propecia following the introduction of Proscar).
The combination of bupropion/naltrexone looks promising. Hope to see OREX take off. Good luck.
Hmm, and if you'll notice, there's at least equal potential upside in ABX as compared to GMO.
ReplyDeleteThese are far from being identical animals though. One sports a tusk while the other has horns, and neither is a unicorn.
Mark - I just reopened a position in RAS...starter at $2.56.
ReplyDeletetof- OREX is based in La Jolla.
ReplyDeleteAdded a little more RAS at $2.54. I have a bunch of 401k money coming free tomorrow that I will be using to buy RAS. I think the $2.40s to $2.50 level is a great buyin point.
ReplyDeleteGMO has an order imbalance on the sell side.
ReplyDeleteTOF- Great job side steeping the recent weakness is RAS.
ReplyDeleteJust sold 10 March $5 puts on GMO for $0.5, so as to buy 1000 more shares at $4.50 (or pocket $500).
ReplyDeleteAdding to RAS @ 2.49.
ReplyDeleteAdded more RAS at $2.5. Let's see where she goes Mark. I'm probably going to be adding quite a bit tomorrow and the rest of the week.
ReplyDelete2nd - what's up with OREX? I think I have a friend that recruits for them...
is it time for f*cking cocktails yet?
ReplyDeleteBuy-and-hold back into OAKBX
ReplyDeleteBuy-and-hold back into OAKBX newSubmitted by 2nd_ave (5201 comments) on Mon, 01/31/2011 - 15:59 #78700
ReplyDeleteLiking the 'positivity' for a change.
edit reply Bookmark this
FDA is scheduled to give the green light to Contrave (diet pill) by the end of the day.
ReplyDeleteby the way, Mark, did you get your RAS dividend today? i just realized that my accounts got the dividend. not too shabby.
ReplyDeleteSo much for the negative news on INTC> closed flat.
ReplyDeleteSHZ - Crappy day there for longs...
ReplyDeleteMark - Large volume spike went through on RAS right at the lows of the day. My first take is that they are trading this purely on technicals right now.
ReplyDeleteINTC> closed flat newSubmitted by 2nd_ave (5202 comments) on Mon, 01/31/2011 - 16:03 #78701
ReplyDeleteOne sign undervalued large-cap technology stocks may outperform this year.
Alright, so the DJIA didn't hit +100. However, after hours I see bids taking it to +77. That's close 'nuff for me, yo.
ReplyDeleteDamn, NVLS kicks ass after hours, despite missing earnings by a few cents. Still, an impressive quarter.
ReplyDeleteNVLS +4% in extended hours newSubmitted by 2nd_ave (5203 comments) on Mon, 01/31/2011 - 16:12 #78705
ReplyDeleteMisses on earnings (0.89 v 0.94), but beats on revenue. Earnings for this sector continue to rock.
2nd - speaking of large caps (not necessarily tech ones) take a look at BBY. I find it hard to imagine that this one doesn't rebound at some point this year. Company is trading at 10 times trailing earnings and 9 times trailing annual cash flows.
ReplyDeleteMark - You want to hear something really pathetic? I kid you not I had a dream over the weekend that I watched RAS shoot up to $5 per share while I was waiting for my money to free up in my 401k (which happens on Tuesday). It was a pretty realistic dream...I was watching it on my streamer and saw it gap up to $2.95 with a huge order, then it steadied and just ran up almost 100% all while I wasn't in it. How sad is it to have a dream like that?
RE: REDF > if any of you guys are tempted to get into this crappy company, it's back at prior resistance around $6. Someone out there is making a killing off of these moves in this stock.
TOF- Not yet. Your with Schwab right?
ReplyDeleteGot to hop...BTW...APA is over 119 buckers :)
Tomorrow we get the +100 points on the DJIA.
ReplyDeleteMark is probably up >2% today. Two more pizzas.
ReplyDeleteRe: american home ownership
ReplyDeleteSubmitted by Vadym Graifer (1735 comments) on Mon, 01/31/2011 - 16:03 #78702 (in reply to #78695)
As Vad has said in his flawless Russo-English, "lower can always go lowerer."
Hey, ever since I mastered English betterer, my version went furtherer:
Oversold gets oversolder until it becomes oversoldest, and then it sells some more.
This way English becomes butchereder (Grin)
Re: american home ownership newSubmitted by 2nd_ave (5204 comments) on Mon, 01/31/2011 - 16:28 #78707 (in reply to #78702)
ReplyDeleteOversold gets oversolder until it becomes oversoldest, and then it sells some more.
The Sino-English version:
Oversold. Double down. Oversolder. Double down. Oversoldest. Double down.
Mark - My 401k is with some annoying ING brokerage that charges astronomical commissions and only allows you to buy blocks of a max of 5000 shares at a time online. It totally sucks but it's the only thing my company offers. We used to have Schwab and there weren't any restrictions like this.
ReplyDelete