Tuesday, April 5, 2011
4/6/11 The end has come and found us here
The end has come and found us here
With our toys scattered all around us here
The puzzle that we never found an answer for
Still asks us, darlin', just what all the games were for
And here we stand in a box of sand
A guy that worked in the department across the hall from mine retired a month ago. Seemed to be a good guy, although we never really talked enough for me to consider him more than a passing acquaintance. He mentioned surviving a heart attack that occurred several years ago. Man, he had another one recently, but didn't survive that one. Just found out today.
I'm not saying I have a premonition regarding the market. I don't. But it wouldn't surprise me if a second Flash Crash arrives Q2 and flatlines us again. Complacency precedes many of life's negative 'events.'
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I think the market is set up for a gap up soon.
ReplyDeleteThanks for spreading such CHEER! 2nd.
ReplyDeleteSure. You guys deserve the best!
ReplyDeletetof- I don't doubt we'll end the year higher. But we need to see one of those 'much lower' moves sooner or later. I just think it's sooner rather than later.
ReplyDelete2nd - i was originally thinking that and maybe we do but there are way too many people that missed the big part of this bull market run and it's evident in the way that the market just keeps getting bid up. maybe we go range bound here for a little while but we have been trading in this area for 2 months now and it seems to me that the pressure is building for another run higher. plus, with gold breaking out despite much better econ reports and with QE2 ending, that tells me that inflation is getting priced in across the board...perhaps higher inflation than everyone thinks. if that happens then i think there is an inherent support underneath this market because corporations are clearly still doing very well. i mean look at ANF today...
ReplyDeletethat was a bit of rambling but inflation higher than people think yet not too high means higher asset prices across the board. and corporations are weathering the inflation storm pretty damn well from what i can see.
ReplyDeletetof- Yes, but you were thinking that a few days ago. And may be thinking that again a few days from now.
ReplyDeleteMy slightly profitable quarter end position has improved today with the bang-up in GLD, RBY and even CSCO. Also, I sold CALM yesterday for a small profit after holding for a few days. Nice safe trading vehicle but I am more interested in the intermediate to longer term. Including dividends such as NLY. Still have cash.
ReplyDeleteJapan is a mess. Stox tanking today include EWJ, FXY, TM, HMC, MTU, even Sony (SNE). Shorts anyone?
ReplyDeleteNothing Super here...AMSC.
ReplyDeletePerpetual motion is dead!
ReplyDeletewait...what am i thinking again 2nd? my head is scrambling.
ReplyDeleteLooks like we got a little good news on the reactor leak, no?
ReplyDeleteTeam you were bearish, but because you were bearish you thought everyone else was bearish so you were bullish, but because J6pac missed the rally because they were bearish they are bullish now because they fear missing further gains which is more painful then actually losing money so you are short term bearish with over bought conditions. Intermediately bullish on dips until a 15% washout comes to turn j6pac sentiment back to bearish at which time you will be bullish with a shopping list of undervalued and under-appreciated stocks that will soon become nine baggers. With all that in consideration I would say you are market neutral.
ReplyDeletehaha...exactly RB.
ReplyDeleteI'm either bullish or bearish with a bullish tilt. Either way, I can't find myself being short for more than a small hedge on my portfolio.
I tend to agree with Team on the market going forward, although I think we are due for a quick, steep pullback at some point. I think that our small cap momo plays may have some juice left in them....
ReplyDeletePer Sentimentrader today:
"A couple of months ago, we discussed the surge in speculative Over-The-Counter trading activity (aka penny stocks). The absolute level of trading volume wasn't that great, but expressed relative to total Nasdaq Composite volume, we were near a record.
In March, penny stock volume dropped dramatically, with share turnover in these lottery-ticket stocks declining by more than a third (-34% to be exact). At the same time, Nasdaq Composite volume picked up a bit.
Taking those factors combined, penny stock volume as a percentage of Nasdaq volume went from 391% in January to only 165% in March. That's about in the middle of the range for the past decade.
If we look at just the raw share volume, we can see the sharp pullback in speculative activity. The only months since 2003 when share volume was lower were September and October 2004, and October through December 2008.
That's pretty remarkable given how well the Nasdaq has performed over the past couple of months. We rarely see this kind of pullback in the most speculative part of the stock market when equities in general have been doing so well.
The mid-March mini-panic really seems to have dinged the animal spirits that were starting to rage among these traders. That's probably a positive for the market going forward."
tof- It looks like we get your gap up.
ReplyDeleteGap Up/ Risk Off newSubmitted by 2nd_ave (5458 comments) on Wed, 04/06/2011 - 08:48 #83215
ReplyDeleteAfter each close, I normally try to consider all possible scenarios for the following day. For some reason, I mentally dismissed the possibility of a gap-up this morning. When I'm this far off the market's rhythm, the only recourse is to stop and listen/ watch and wait> risk off. 50% cash/ 50% FGMNX.
Congratulations to those playing the spike in metals/miners.
Man I can't get into this rally- but that hasn't helped me.
ReplyDeleteLandry-
ReplyDeleteGot Random Thoughts:
The Russell managed to close at multi-year highs once again. The Ps and the Quack a stalling a bit short of their old highs but in general, are hanging in there.
As I've been saying quite a bit: my concern here is that it's difficult for a market to launch a new leg right on top of a new leg (e.g. an overbought condition). As usual, one day at a time though.
The good news is that the sector action still looks great. Many banged out new highs on Tuesday and many others are just shy of new highs. So again, internally, the market still looks healthy.
Continue to trail your stops higher on existing positions and take partial profits as offered.
I'm seeing a lot of stocks in great trends but no setups. This is normal since the methodology requires a pullback. So, it's a get ready to get ready on those issues.
Barclay's raises PT on PXP from 49-52.
ReplyDeleteHFT, Co-Location & Quote Stuffing
ReplyDeleteYour competition, nice vid for a slow period or after hours.
http://algofutures.com/blog/nice-video-on-hft-co-location-quote-stuffing-the-sucker-at-the-table/
Interesting news from MGIC.
ReplyDeleteRB- What's our PT for RBY?
ReplyDeleteTZA exceeds expectations newSubmitted by 2nd_ave (5459 comments) on Wed, 04/06/2011 - 09:42 #83227
ReplyDeleteEvery time she hits bottom and you think she can't sink any lower, she does.
You all know I'm going to play AMSC right? :)
ReplyDeleteAEM out at 67.37
ReplyDeleteSPX needs to break 1344, till than for me it a stretched "band on the run"
Most likely will lighten up today
Frigin MDW is an animal.
ReplyDeleteMan, NObody is trading. Is that a trap door under me?
ReplyDeleteRe: Gap Up/ Risk Off newSubmitted by 2nd_ave (5460 comments) on Wed, 04/06/2011 - 09:56 #83229 (in reply to #83225)
ReplyDeleteYou'll be the guy in the 'Michigan of the East' T-shirt? Just make sure we're not waving to you on the way back as well ;)
CSCO/INTC going in different directions.
ReplyDeleteCSCO getting animal spirits?
ReplyDeleteWhat a friggin mess. Ungly charts everywhere.
ReplyDeleteTook profits in MGIC/RBY/GMO. These were all in my IRA so I wanted to have some felxibility come Fri.
ReplyDeleteLong BBY at $29.12...i know, i know...the company is a dying breed. However, in the past 12 months they have generated over $1.6 Billion in free cash flow and repurchased about 5% of shs outstanding. The company is only trading at about 6-7 times free cash flow.
ReplyDeleteBoring!!! WTF even the high beta bullshit isn't moving.
ReplyDeleteI think a significant change will be underway in the markets...namely I think people will be moving away from the momentum highfliers and into the beaten down US companies. As a result, I decided to sell my DANG calls at breakeven today and I moved all of my remaining money into BBY. I now have BBY, RUTH, and NLS, three beaten down, dragged out predominantly US brands. All of these have solid upside potential in my mind in large part because they are so cheap. Both RUTH and BBY are trading at 6-7 times free cash flow, which has to be very enticing to a potential buyer or just investor in general. NLS has significant operating leverage should the jobs market and consumer credit market continue to improve.
ReplyDeleteCSCO and MSFT are reportedly benefiting from the rebalancing of the Nasdaq 100.
ReplyDeleteRe: CSCO/ Scaling Back In @ 17.92 newSubmitted by 2nd_ave (5461 comments) on Wed, 04/06/2011 - 11:08 #83240 (in reply to #83235)
ReplyDeleteThanks for the alert, bro. A floor may finally be in place.
Adding INTC @ 19.79 newSubmitted by 2nd_ave (5462 comments) on Wed, 04/06/2011 - 11:20 #83242
ReplyDeleteHarder to make a case for institutional accumulation in INTC, but we could be seeing the beginning of the long-awaited rotation into large-cap value stocks.
David - I know how you like to sell puts on companies...I think selling puts on BBY might be a really good strategy here. The company is trading at 6.5 times free cash flow and about 8.5 times earnings. On top of this they pay just over a 2% dividend. I think in 12 months the stock could easily be up in the upper 30's.
ReplyDeleteForgot to mention that I also have some ITM calls on XLF from yesterday...XLF chart is really strong IMO with it back up above its 50 DMA.
ReplyDeleteBlown out of all my stuff ATEA +10%, LMLP -7%, UNG -2.5%. Its all about position size. I feel like Amaranth right about now:)
ReplyDeleteI'm out of everything. going to buy the dip :).
ReplyDeleteWish WPRT would come in so I can add. Yesterday's near fill of the gap was the missed add in point. Two up gaps in the last six days. unreal.
ReplyDeleteYes, the re balancing has certainly put a bid in the recent dead.
Sold out of AEM, MHS, RWT this morn
only hold MSFT, MDW and BHI market needs to come in for me till than hit and run
Oh and WPRT
ReplyDeleteguys i think it's important to note the positive trading in the blue chip laggards over the past couple of days. i think the rotation is finally on for these companies. i think its time to buy the BBY/TGT/CSCO/HPQ/etc that have missed the rally...
ReplyDeleteI can't think of any reason to buy UNG here. The chart looks awful. It sliced through the 20 and 50 day. Looks terrible. I'm thinking everyone else feels the same way. Picked up 10.89 w/ a .05 stop...
ReplyDeleteOK, the good news. Took profits in RBY +7.60%/GMO +8.20%/MGIC +2.78%.
ReplyDeleteThe bad news, BEXP got gang rapped while I was away. Port -2.88% on the day. CLR/NBR getting raided also. (Those are very similar plays).
So, do I take profits here in PXP/BEXP or is this the pause that refreshes?
Such weighty issues for a pin head.
RES/LNG/CPE/GLNG/HERO/CLR...Man, what a wipe out.
ReplyDeleteGMO...
ReplyDeletehttp://elkodaily.com/mining/article_1677ac26-600d-11e0-8c8e-001cc4c002e0.html
BEXP. 20sma at 34.89 looks like a good line in the sand too me.
ReplyDeleteTaking some off the table always helps me manage the little guy in my brain.
I'm actually thinking its probably a good idea to lighten up on our positions here...I'm probably over thinking this but the market is stalling out at these levels which suggests to me that we could finally see a retracement. I may be pulling some of my positions off and / or buying some deep in the money puts on SPY.
ReplyDeletehmmm...i'm thinking after the gap higher today, followed by trading sideways, that we potentially gap lower....i still think the rotation into blue chip laggards are the play if we pull back.
ReplyDeletelooks like i was just getting scared....market doesn't look too weak.
ReplyDeleteI decided to buy a few SPY $138 May Puts at $5.25 just in case so that my portfolio is hedged.
ReplyDeleteCompany ghost: GNY
ReplyDeleteThe company will disappear in 4 years but is still trading at $150. Calculation in this story explain the rest
http://www.citronresearch.com/index.php/2010/12/28/a-stock-only-a-trading-robot-could-love
Any thoughts?
Just got off the horn with X+3B. You al know the connections. Buddy of his owns a little bit of WPRT. $60M worth. He thinks when Obama is in PENN. today he will talk about tax credits/depreciation rates for LNG trucks.
ReplyDeleteMakes sense, PENN is the heart of natty land.
would the play be LNG then Mark?
ReplyDeletealright...just sold some BBY at $29.79. I can't ignore a 2.3% move intraday on a big cap like this. I also sold my calls which were up about 20%.
ReplyDeleteSold the rest of my BBY at $29.91. Again, can't ignore this big move in a big cap which has basically taken it to the top of the range. I'll be looking to enter this and the other blue chips lower if we pull back.
ReplyDeleteadded a couple of more SPY $138 May puts at $5.16. I can't ignore the following facts:
ReplyDeleteAAPL
BIDU
FCX
IYT
CAT
BTU
All red. Even though I think a rotation is going on...this is bearish short term.
Sold my XLF calls at a 10% profit. Sold some of my NLS and RUTH...still have pretty big positions in those...now down to 50% cash.
ReplyDeleteI was busy this morning, and I see something fishy is happening in the market now. Or should I say it is exactly what TOF and 2nd_ave were waiting for: a rotation from small risky momentum stocks into large caps. Good call on BBY today, TOF! I might sell some puts on it if we get a sharp market correction, during which puts jump up in price.
ReplyDeleteAll my 3 trading stocks (CCJ, DANG, REDF) that I bought on margin with stops are red today. What a day. REDF, in particular, did exactly what I envisioned yesterday: it dropped just below yesterday's low at $7.75, shook out some weak hands, and then moved higher. I am glad that I finally didn't place a stop at $7.75. Now, once such a shakeout did take place, I am placing a sell stop limit order at $7.60/$7.50, a little below today's shakeout level.
The one bright spot in the day for me is ... You guessed it! ECUXF hitting my sell limit order at $1.10 for 5000 shares I bought on margin in my Etrade account at $1. Now, in that account, I have two more 5K share lots of ECU, which I picked up during the Japan panic at $1 and $0.86. Let's see if I'll be able to keep them for a year so as to book a long-term gain on them. Needless to say, I still have ECU in all my other accounts, for a total of 1/2 of my portfolio.
ReplyDeleteLng SFN
ReplyDeleteIncidentally, at some point yesterday, I placed a stop on CCJ at $30.50, just below yesterday's spike down. But then I decided to move it down to $30.25, so as not to become an easy target for a shakeout. Well, that shakeout did happen today, with CCJ dropping to a low of $30.39. So it is reasonable to expect both REDF and CCJ to zoom up tomorrow, after a number of weak hands where shaken out today.
ReplyDeleteAs for DANG, I really like its chart. I just picked up 400 more shares at $20.84 (for a total of 1K shares) and placed a sell stop for all of them at $19.95/$19.90.
If the market has a nice gap down tomorrow, I'll get shaken out of all my trading stocks: REDF, CCJ, DANG for a loss of about 1K on each one. But if the market zooms up tomorrow...
And I forgot to mention that my buy limit order at $5 for 2 July $40 calls on ALGT was triggered today. ALGT should zoom up if oil heads back down.
ReplyDeleteAMSC - Wow, glad I wasn't in that one. I had been hearing some pumping but stayed with stuff I has a better handle on.
ReplyDeleteFTWR - Yet another bad day there...
RBY - That's a breakout, isn't it?
ReplyDeleteNKE - I'm happy to let her run.
GMO - I didn't think it was ready to run, needs positive water permit news.
"Company ghost: GNY"
ReplyDeleteIgor, that article only computes only the NPV of GNI cash by 2015. What about all property, plant and equipment?
AEM, back in on close
ReplyDeleteMan today's trading across several segments of the market was downright ugly. But at the same time it was downright pretty in other segments. What a strange day. You could either have been killed or made a huge amount if you were all in on either side while the market traded more or less sideways. Wild stuff. I think as the market passes the baton in what I think will be a big sector rotation, it wouldn't suprise me to see a pullback. If it does I will use the money I raised today to buy those beaten down blue chips. Given my strong desire to not give back my lucky gains this year, I think this is the perfect play...it lowers the risk yet should this rotation come to pass then I would be in early on what hopefully is a relatively longer term move.
ReplyDeleteAfter a little thinking, I decided to re-activate the ECUXF money pump, and so I placed a sell limit order at $1.15 for 5K shares I purchased at $1.10 and also at $1.20 for 5K shares purchased at $1.15 in my Scottrade account.
ReplyDeleteLooks like quite a few of us lightened up today. I was more or less forced to due to the blood running in my portfolio. My day culminated with another UNG stop. One look at EEM, EWA, RUT and their inverses and I see a risk of a big thrust down. I'm not predicting it, but I think risk is way too high given the extended charts. Take a gander at EDZ. Its pulled pretty tight.
ReplyDeleteThe SPY chart certainly looks like it is begging for a thrust down to at least $130. But then, why hasn't it done that already? Instead, SPY keeps grinding higher within the $132 - $134 corridor. If this keeps up for a few more days, then those who have already shorted the market in expectation of a retest of recent lows give up and provide a nice short covering rally?
ReplyDeleteDavid - I agree that is definitely the possibility. Personally I'm just freeing up cash in the event the market tries to test the 1,300 level one more time. If it pulls back I'm thinking maybe a pullback of about 20-25 S&P pts. Otherwise, I'm ok with missing the next move higher if it means having more conviction.
ReplyDeleteRBY - A breakout of the upper downslope line, yes. Left it's moving averages in the dust a while back.
ReplyDeleteIOC - Anyone see this as an LNG play. Interoil Corp, a holding of the Soros Fund. Down 4% today.
GMO - General Moly presents update to Eureka
ReplyDelete* "Bob Pennington, vice president of engineering and construction, said General Moly expects State Engineer Jason King to issue the company's needed water permits possibly in April"
* "Pat Rogers, director of environmental and permitting, said the BLM's record of decision on Mt. Hope should be out late this year or early next year."
http://elkodaily.com/mining/article_1677ac26-600d-11e0-8c8e-001cc4c002e0.html
IOC - Never heard of it. Looks like it's trading sideways but today someone dumped?
ReplyDeleteWonder what Soros sees in it, buyout?
IOC - 4/16 Max Pain is $75
ReplyDeleteMy head still hurts from getting run over by that truck today.
ReplyDeleteBack to BEXP/PXP and now have about 30% cash.
Finished the day with a 2.90% hair cut. Problem is, more than just my hair got cut.
Mark - It's never a good idea to stick your nads somewhere they really shouldn't be, the washing machine ringer is one of those places. ;)
ReplyDeleteKlugh Winery bank repo auction tomorrow, I'd thought about attending but didn't make it by the bank today to prepare a cashier's check.
ReplyDeleteI was gonna best Trump's first bid, if he shows up.
HIT - Coming back to me, trying to keep an eye on this one for a good entry opportunity...
ReplyDeleteIOC - http://blogs.barrons.com/stockstowatchtoday/2011/03/28/mkm-neutral-on-ioc-but-lng-interesting/?mod=yahoobarrons
ReplyDeleteDoesn't explain Soros interest nor todays drop. Company is Aussie and has corner on NG in Papua New Guinea. Producer and refiner. Building LNG terminal next to their refinery in P N G. Japan, baby, Japan.
Mark > what did you get hit by today?
ReplyDeleteI've been thinking about this some more and I think the action in AAPL is telling us that the iPad is a fad. We actually bought one and aside from it being cool to look at and play with, it's not that practical. You can't view any adobe stuff on it, it has weak computing capabilities and the lack of a keyboard makes surfing and doing stuff on it harder. I think it ultimately could be a fad.
ReplyDeleteTM - Bounced off the 200SMA
ReplyDeleteSLW - Running into resistance?
Ten years from now it'll be known as the iFAD?
ReplyDeleteOkay, maybe sooner than 10yrs, I shouldn't be overestimating product lifecycles.
ReplyDeleteCopper - Wow, that was a big pop there... +2.47%
ReplyDeleteSMH/XLF - Nice day there, maybe there's a little more upside remaining in this market? SPY RSI(7) is over 70 but could go to mid 70's before turning down?
ReplyDeleteI'm pretty sure oil's still a major factor here, what hit producers today, just a little profit taking?
Which stocks get whacked from a government shutdown?
ReplyDeleteAs I thought a little more about my ECUXF money pump, I decided to remove the sell limit order at $1.15 and leave only the one at $1.20. ECUXF made a clear higher low and a higher high on the daily chart -- why rush selling it now?
ReplyDeleteMark -- did you pick up any when it was under $1?
Wonder how the austerity plan is working out for the euro community lately?
ReplyDeletenew post
ReplyDeleteWonder if physical PM premiums are trending upward?
ReplyDelete