Thursday, February 16, 2012
2/16/12 I was standing in line with Mr. Jimmy
And man, did he look pretty ill
We decided that we would have a soda
My favorite flavor, cherry red
I sung my song to Mr. Jimmy
Yeah, and he said one word to me, and that was "dead"
I said to him
You can't always get what you want
You can't always get what you want
You can't always get what you want
But if you try sometimes well you just might find
You get what you need
Yeah, I was 'Mr. Jimmy' all last week.
Today? FBGRX> +1.31% in the 403(b). BAC and MET both up nicely, especially when viewed against the opening gaps down. Picked up IRE @ 6.48, still holding (do you have a target, Craig?). Opened positions in NBG (3.63) and RENN (5.52) after hours.
Let's review what happened this week:
(a) I don't know crap about the market.
(b) Landry's book arrived today, and I plan to begin reading Friday evening.
(c) I took a position in FBGRX at Wednesday's close pretty much due to Craig's recent comments re opening positions in the direction of the trend on pullbacks. Did I front-run the trade? Sure. That's just my nature.
(d) Thanks also to Craig, a pass line bet on IRE paid off well. Which led to place bets on NBG and RENN until I seven-out.
Can't thank you enough, bro. Your encouraging comments/emails re 'another train' pulled me out of my doldrums.
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This blog has some awesome karma, baby.
ReplyDeleteLove the RENN entry 2nd. I looked at it for a good half hour today. RENN, DANG, DATE etc.. all setting up.
ReplyDeleteAre you still trading UNG, jesse?
ReplyDeleteI know you would do the same for me Bro.
ReplyDeleteIRE target/stop. Pick the biggest price movement bar and add a hair more. Subtract from your entry to get a stop and add to your entry to get the PT. Take 1/2 off at the PT then move the stop to break even at the entry price.
I'm off to a community meeting, will be back later for more....
Nikkei opens +2%.
ReplyDelete"I'm off to a community meeting"... Thanks!! That's a good one. I'll have to remember that.
ReplyDeleteGMO - "General Moly receives confirmation for $665 mln term loan from China Development BankBriefing"
ReplyDeleteGMO- Libor +4% w/ a 30 month grace period. Interesting news!!
ReplyDeleteSee that's the problem with China. They put up 600M for something silly like a mine and GS/JPM plow 600M into the 9ers stadium that will have 8 games a year.
ReplyDelete"GS/JPM plow 600M into the 9ers stadium that will have 8 games a year."
ReplyDeleteWell, someone's got to provide the steel!
Hey Mark, I had to go to the local brew house for a meeting. As long as they are at the brew house I'm up for it.
ReplyDelete2nd, IRE PT/stop. It looks like IRE can move about 75 cents on daily noise, so you want to be outside the noise for your stop, and the price target will be the same amount above the entry.
I'd probably pick a round number like $.90 or $1.00. So if my entry was $6.48 I'd put my stop at 5.48 and my PT at 7.48. This way you don't get stopped out of your trade on normal price movements.
Position size = port size X your percentage of loss (Landry uses 2%) divided by normal volatility ($1.00). So for a $100K example it would be $100,000 X .02 = $2000, divided by $1.00 = 2000 shares.
If you can handle more risk then use the appropriate percentage.
Notice, folks, that $USD futures have been making higher lows and higher highs since 2/9:
ReplyDeletehttp://www.forexpros.com/quotes/us-dollar-index-advanced-chart
So in order for me to remove my hedges, two things have to happen: S&P has to breake out to new YTD highs AND $USD futures have to break below the most recent low established today at 79.40. I expect both of these events to happen tomorrow.
NBG- Took half off @ 3.87. IRE 'near' target and considering taking partial profits.
ReplyDeleteIRE: Don't split hairs....if it gets close then it's close enough. Maybe put a trailing stop on it to capture additional gains if it goes higher.
DeleteIt's that first "loaf" (1/2 position) that keeps the lights on and the psyche fed. :>)
For S&G's I looked at my IRE chart....it's going to go higher then it's previous highs if 8.15.
DeleteI am in TOF's camp here. I'm buying, setting stops, taking partial profits and re-setting stops. If we get a bigger pull back and a resumption I'll add to the existing positions.
Of course that's today's Craig talking. Someone may have to talk me off the ledge later....
Hey guys I really think it is a good time to buy and hold and just enjoy life...maybe go the laundry way and trail your stops. If not then i would recommend checking out wfr as at least a short term trade. It is a solar play and a semiconductor play. Both of it's businesses are at rock bottom and the chart made higher lows in a pretty nasty shakeout...no different than rdn a few weeks ago (before it ran 50% higher)
ReplyDeleteIRE closed @ 7.3x...
ReplyDeleteOpening AMAT @ 13.90...
ReplyDeleteGrvy train going higher.
ReplyDeleteAdding to AMAT @ 13.56...
ReplyDelete2nd- I dumped natty yesterday in lieu of the riskiest trade of my career.
ReplyDeleteAs I commented a little bit on this board yesterday, I saw something forming in the solars. In fact, I had never seen such setups across the board in every single solar- specifically FSLR, TAN, LDK, TSL, and YGE.
I said what the F*$K....I put the entire portfolio into FSLR Feb $37 calls (expiring today) at the bell yesterday. I was a nervous wreck the entire night.
I wake up this morning and I get:
1)Huge SPWR earnings
2)Huge STP earnings
3)A $1.5 billion FSLR back in play
4)China to cut 30% of poly production
Although I think FSLR could ramp up 20% today, I just sold my calls for 300%.
Time to enjoy the long weekend.
Oh ...you're going to get a call and an email from your broker now!
DeleteRisky but rewarding, awesome job Jesse.
Re-entered IPSU 5.39
ReplyDeleteWTF Jesse
ReplyDeleteIt sure feels like you can buy and hold here.
ReplyDeleteAll the talk about Greece - I don't think Greece matters at all anymore. Either they restructure or they go bankrupt - either way it is done.
I really believe what is happening is you have an undervalued market in an improving economy and underinvested fund managers, so stock prices should be higher to reflect this. People will sell on news as they want to protect profits, but pullbacks are being kept very small.
I think what you want to be doing here is monitoring your portfolio and upgrading from fair valued stocks to undervalued.
As such, I sold my New Zealand Telecom (NZT) yesterday and bought some Loews (L) at $38.04.
The telcos and utilities are among the most highly valued based on traditional metrics and their growth prospects.
L is a conglomerate/investment firm - they own CNA Insurance (CNA), plus Diamond Offshore Drilling (DO), Boardwalk Pipeline (BWP). I owned this stock back in 2003 when in traded at similar discount and the economy was improving. It almost doubled in 2 years as the market revalued their assets based on the expectation of a decent economy as opposed to a poor one. It has good assets and a strong track record of value creation. It's largest holding is CNA which is in the P&C insurance market which is hardening (prices improving) and the majors P&C companies like CB and TRV are seeing much better valuations and CNA should catchup.
If I assume valuations return towards good market valuations like we saw in 2005 - 2007, it is easy to make the case for L to get over $95, so a double should be easy here. Plus, you've got strong downside support as both L and it's major subsidiaries are trading near the lows of their 10 year valuation metrics.
jesse- You need to chill and try skydiving instead.
ReplyDeleteI don't think I can ever put another one of those on. I think I came pretty darn close to having a heart attack last night. I think the only thing that saved me was a $5 bottle of Ecuadorian rum. Seriously.
DeleteI 2nd WTF by TOF and make sure you use a parachute while skydiving!
DeleteHere's a new name SPIN.
ReplyDeleteCovering GILD short here.
ReplyDeleteOut IPSU for a quarter
ReplyDeleteI think this sugar trade goes but I'm waiting for it to develop.
DeleteI get plenty of sugar from my rum habit.
Sold a bit of my immr at 6.51 and bot more grvy train @2.78
ReplyDeleteI think the top is in guys. Today may be the day. Full position SPXU now 10.195. I'll share some info. in a bit.
ReplyDeleteBuyout rumor on fio is spiking it. Rumor is intc
ReplyDeleteGuys-I'm putting a bunch of charts together that indicate a possible imminent market top. Email me @ naztradamus2@gmail.com if you want me to send you the charts..
ReplyDeleteJesse - we have to at least ring the bell at the double top at 1,370. but honestly, i think we go to 1,400 at least before a meaningful pullback of 3 to 5%
ReplyDeleteCould be TOF, I'm just seeing a lot of signals lining up at once. I think today's hod is the top going forward for the next couple of months. I'm fully positioned to take advantage of such a scenario. Stop a tad bit above today's high of day.
DeleteHere's what I have thus far:
ReplyDelete-I see a series of reversal candles over the past 5-6 sessions in Shanghai.
-Crude has topped. It needs to come down now if the economy is to stay on track.
-Gas has topped- UGA.
-AAPL has MAJOR weekly topping candle.
-SOX has topping candle outside of bolinger band today.
-Fed is jawboning about QE3. They need the market to come down considerably to gain support.
-Gold has topped.
-NASI crossover sell signal.
-Transports rolling over.
-NYSI summation ratio rolling over below 5 ema (sell signal)
-EEM showing topping pattern.
I see 5 topping tails (all outside of bolinger band) over last 6 trading sessions in Shanghai at what looks like tail end of rising bearish wedge pattern over past 2 months.
ReplyDeleteShanghai has been my cue and what prompted me to get outrageously bullish on Dec. 31.
These all look to be low-risk, high reward short sectors:
ReplyDeleteGaming index
SOX
biotech
apparel retailers
building materials
chemicals
clothing and accessories
computer hardware
footwear
steel
software
gold bugs
German DAX
Short candidates:
ReplyDeleteIPGP
REGN
STMP
Record High In Bullish Sentiment
ReplyDeletePosted on February 10, 2012
On Monday, traders in the Rydex family of mutual funds reached a near-record level of bullishness.
The chart below shows the Bull Ratio for all the index funds. This is the total assets in the long funds for the S&P 500, Nasdaq 100, DJIA and Russell 2000 divided by the assets in the inverse funds for those same indexes.
As of Monday, there was $4 invested in the long funds for every $1 invested in the inverse funds. The only other time since 2004 that matched this level was May 2, 2011.
As of Wednesday, total assets invested in the inverse funds at the Rydex family fell to $291 million. That ties it for the lowest all-time, along with January 30, 2001 and May 2, 2011. Both dates were good times to own those funds.
Sentimentrader:
ReplyDeleteFebruary 10, 2012
Commercial Hedgers Go To A Record Net Short In Equity Index Futures;
"If at first you don't succeed, then skydiving is probably not for you"
ReplyDeleteThomas Jefferson
:))
DeleteI'm thinking we'll get an 80-90 point decline for the Nasdaq on Tuesday or Wednesday. I'm assuming that Monday is a holiday.
ReplyDeleteYep, Holiday.
DeleteWorst holiday for trading around as well. Friday before President's Day down 16 of the last 20. Tuesday after also poor.
Deletenatural gas just re-entered monthly bolinger band today. Each time this has happened in the past, you see a MAJOR 2 month reversal. It probably heads to $4-$5 w/in 8 weeks. Probably a 700-800% options play.
ReplyDeletewow FIO. My friend has 65k shs of this thing. yeesh
ReplyDeleteYour friend has some coin.
Deletemy old boss...he's the reason i got the severance b/c i helped him make $600k last year on MITK.
Deletehe is in on margin on it.
That's gutsy.
Deleteapparently he has only 5k shs on margin so not that big of a deal to him. he bot at 24.. nice score.
DeleteThat's some good stuff Jesse, I'm really happy to hear you knocked another one out of the park!
ReplyDeleteALSK - Short squeeze play?
ReplyDeleteHuge divy. How the hell are they paying it?
DeleteHmm...funny thing. Calls spiked before the buyout "rumor" on FIO. then the najarian brothers go on CNBC and tout it for a buyout. How is the SEC not on top of this nonsense?
ReplyDeleteNo shit, but solar is up next just for you!!
DeleteI think I'm going to submit yet another request to the SEC to investigate Optionmonster. That company and those Najarian guys are nothing but crooks. In plain sight.
DeleteVirginia - Is responsible for $58B of government procurement, #1 on list...
ReplyDeleteOut of SPXU for a slight profit. Gonna wait for the close. Hopefully they can ramp it a bit to buy some puts.
ReplyDeleteI see solars are not in favor per CNBC. weird i couldn't tell that they are out of favor by looking at their monthly stock charts. WFR is only down 95% so it probably has more room to the downside.
ReplyDeletelets get some creative thinking guys. wtf. how about europe isn't going into a depression like people are saying and as a result the solar sector, which got decimated because of the fears in europe, will rebound. regarding WFR, they have a semi biz that makes up almost half of their sales and per the conference call, that business has bottomed.
I wonder what the banksters want, more than anything else, in order for them to remain in control?
ReplyDeleteYeah, I get it that they are only interested in extracting wealth from the system, but surely they play a part in blowing bubbles(I'm not judging the purpose, good things can come from this) and collecting on the result. Take shipping for insatnace, it appears bankers provided the financing for that bubble, not sure if in the end they succeeded in dumping their risk off onto others.
Assuming mankind isn't evolving in reverse, energy will remain a big deal going forward...
So considering solar, if it will ever become viable, which is questionable in my mind, banksters probably want to combine this trade with carbon capping taxation loopholes?
So if I were interested in creating a solar bubble, I would want my materials costs to be as low as possible... Whatever that means.
WFR - Yes, they're one of the go-to sources for high-quality metal. Semi industry is dead in water without high-quality silicon, did they mention anything about their next generation products? I'm wondering about a possible major substrate change...
ReplyDeleteCP - the majority of the call focused on how they're realigning their business to account for a soft market, but they said several times that their semi biz is bottoming and that they're starting to see demand pick up which will translate into higher sales after q1 (probably because of the time it takes to close deals). i honestly don't know much about next gen products.
Deletebut in general people become way too optimistic at the tops and way too pessimistic at the bottoms. WFR is at a bottom. maybe it's not worth $90 but it sure as hell ain't worth $4. the business in good times can generate $2+ EPS. i'd be shocked if it stays down at these levels for long without a buyout.
i remember we were all looking at MTW back at $2-$4 on cara's website and saying how in normal times this thing would be able to generate $1 to $2 EPS and the stock would be much higher. it was hard to believe in 2009 that there would be normal times again. but there always is.
VIX in free fall today. TVIX and VXX setting up again. May look at TVIX into the close.
ReplyDeletePut Call ratio reached the required reading of .53 on the 13th. In the past, selloffs start w/in 5 sessions.
ReplyDeleteAthens, Ga - Nice place...
ReplyDeleteI wake up and what do I see?
ReplyDeleteI see that the TED spread is hanging around a low value of 0.4%. The CDX.NA.HY spread is hanging around a low value of 575 and is down for a second day in a row.
$USD futures had a perfect chance to rally big time today after yesterday's pullback, but they didn't. S&P futures had a perfect chance to pullback today after yesterday's rally, but they didn't. In fact, if I zoom out, I see that $USD futures bottomed on 2/9 and have been making higher low since then, but S&P futures have been creeping higher and they briefly hit YTD highs today -- WTF??? If no one is afraid of the $USD rally, then this market ain't going down.
In fact, today's drop in $USD really slowed down the rate of ascent in the higher lows it has been making since 2/9, suggesting that the pattern might break soon. When it does, I bet S&P zooms up big time.
Now speaking about the sentiment. As Jesse pointed out, last week the traders were wildly bullish. As a result, VXX started creeping up last week as smart traders started protecting themselves ahead of the potential pullback, and when the rest noticed this tendency, there was a HUGE bout of fear last Friday. Since then, the market did not collapse despite the overwhelmingly bullish sentiment, and instead went sideways to work off the bullishness and the technically overbought conditions. Some crappy stocks got hit hard (i.e., my portfolio), but they are coming back today (see TAN, IRE, GMO, SORL, etc.).
I say the "pullback" is over. I got stopped this morning at $18.06 out of my 250 shares of TZA purchased at $19.28, and when I woke up I sold at $2.21 the 10 contracts of IWM puts I purchased at $3.43. I took a $1.5K loss on my hedges, but that's OK, since I also made some nice purchases during this pullback (JRCC at $6.28, 10 contracts of June $2 calls on TAN at $1.25, 3 contracts of VXX puts when VXX was at $28, 1K shares of SORL at $3.03). Overall, I expect that the purchases I made will earn me more than $1.5K, and thus the "pullback" we had was a good thing for me.
Wonder how we capture a Canadian pipeline approval announcement? On second thought, maybe it's already priced in...
ReplyDeleteThe UGA chart sure was a great play, wasn't it? Looks a bit long in the tooth now though, to my untrained eye.
Stepping back, let's not forget the shithole the market was in in mid-December, and a large rally since then is fully justified. This rally doesn't have to have a major pullback, because we ALREADY were in a shithole just a little while ago. Stepping back even further, the market was scared of a recession in the summer of 2010, and S&P pulled back to 1100. After that, it had one continuous multi-month rally until it started fearing recession once again in the summer of 2011, and S&P pulled back to 1200. That's a pattern of higher lows, folks!
ReplyDeleteAfter that, we had only a small rally back to previous highs, and it is only natural for this rally to continue solidly to new highs, until new recession fears materialize this summer. :) Don't forget to "sell in May and go away" this time!
Why would the market keep rallying big time now? LTRO! The first round was a huge success, as traders really piled into European sovereign debt as planned. The next round is on Feb 29, and I doubt the market will have a large pullback until it sees the effects of that LTRO. I expect the effects to be very positive, since banks will look back at the outcome of the first LTRO and will want more of the same.
"In fact, today's drop in $USD really slowed down the rate of ascent in the higher lows it has been making since 2/9, suggesting that the pattern might break soon. When it does, I bet S&P zooms up big time."
ReplyDeleteSounds like a contrarian play, I've heard a theory that traders are borrowing euro's (because the currency isn't appreciating) and buying US equities.
See if a brief move up for the euro doesn't correlate with a brief move down with US equities?
Another interesting note is the recent correlation of silver and euro.
This is what I like to see:
ReplyDeleteMarket Pulse for QQQ
Get Market Pulse for:
AheadoftheNews
Intraday CBOE put to call at 0.81 (!), equity put to call at 0.53... No hedging into the weekend: max complacency. $NQ_F $ES_F $QQQ $SPY.
stocktwits 6 minutes ago
Folks, a major descending wedge has formed on JRCC over the past few months. With UNG breakout out today above the horizontal corridor it was in since Jan 31, this could be the start of a MAJOR rally in JRCC...
ReplyDeletePundits praised Mario Draghi for “moving the ball”
ReplyDeleteand breaking the logjam on talks.
Debt experts, however, were less enthused, thinking the swap offer may have sprung from a condition in the fine print of
the existing debt.
The current bonds held by the ECB and many European banks have what is known as “Collective Action Clauses” (CAC).
That, in laymen’s terms means that if a majority of the bonds held, agree to a change of terms, all the other bondholders
are bound by the altered terms. The tipoff is that the new bonds, to be swapped for the current bonds, will have no
collective action clauses. So, if the new bonds are issued in time, the ECB will not be bound by the haircut that private
holders may “agree” to. (Hat tip - Chris Walker, UBS)
Okay, so if the market does roll over, what will they blame it on this time, profit taking?
ReplyDeleteThat or oil prices/Iran. There is always some line of crap which compared to the day before or what happens the day after is unadulterated bull shit.
DeleteSeriously, I try to not watch any news, especially those assholes on CNBC.
I got a hair cut not long ago and the fricking barber had it on two screens...I about pulled my own hair out and I was only there for 30 minutes. I purposely buy a TV programming package that doesn't offer that piece of shit. The only thing worse is Bloomberg in the afternoon with that whiny voiced chick from SF. ARRRG! Fin ent TV is the worst! Wait, the local news read by total morons is worse. "The DOW did this or that and the NASDAQ closed at blah. Who watches the DOW? I read BC's missive this AM, he rants about it but he's right sometimes.
As for AAPL, one look at its 2-year chart shows that it goes up in a "staircase" pattern: a huge rally followed by a long sideways consolidation. So the recent rally in AAPL will most likely result in one more long sideways consolidation rather than a major pullback that takes the market down with it.
ReplyDeletei agree. the company still has a lot of momo ahead of it in the pc biz. that's a trend that is still in its infancy. i expect a sideways move too.
Deletethey trying to give the illusion that WFR is done going up. if i had any free $$ i would be putting more in at $4.75
Looking at QQQ put options. Not seeing anything too compelling price-wise. I'm probably going to go all in TVIX at the close. My return would most likely be about the same w/out the option risk.
ReplyDeleteall in TVIX calls?
DeleteI'm thinking a 150 point Naz down week next week.
ReplyDeletei know i'm biased but the chart of WFR is almost IDENTICAL to the chart of RDN a few weeks ago. a rapid rally, then a sharp pullback with a spike down to the 50 DMA that was gobbled up. then a slow steady rise higher for a few days and then a sudden quick move higher above the 200 DMA. that would correspond to a move to $6.5ish in WFR over the next few weeks, which would be nice.
ReplyDeleteI hope you are right, TOF. :) The WFR chart is almost identical to that of TAN, and I have a decent position in TAN now...
Deletethe TAN chart is better than the WFR chart
DeleteSmart $/Dumb $ spread highest since last March.
ReplyDeleteJust read in the news about the Greek deal:
ReplyDelete"A deal seems to be imminent, although it would really just kick the can further down the road for Greece," said Christian Jimenez, fund manager and president of Diamant Bleu Gestion, in Paris.
"When the deal is finally reached, investors will turn their focus on the ECB's next 'LTRO' operation, which could fuel the stock rally and push the Euro STOXX 50 to above 2,600 points, and even to 2,700."
Sentimentrader:
ReplyDeleteBearish for equities
* New extreme
* Price Oscillator - S&P
* Price Oscillator - NDX
* Intraday Cumulative Tick - NASDAQ
* Put/Call Ratio - Total of All Options
NASDAQ/NYSE Volume Ratio
Rydex Bull Fund Asset Flow
Daily Cumulative Tick - NASDAQ
Fidelity Sector Breath
TRIN - NYSE
NH/NL Ratio - NASDAQ
Composite Model
Put/Call Ratio - Equity De-Trended
Put/Call Ratio - Equity Moving Averages
Put/Call Ratio - Total of Moving Averages
NH/NL Ratio - NYSE
VIX Transform
Sentiment Survey - AAII
Sentiment Survey - Investor's Intelligence
Sentiment Survey - Market Vane
Sentiment Survey - Consensus, Inc.
Intermediate-term Indicator Score
Smart Money Confidence
Dumb Money Confidence
AIM Model
Bullish for equities
ReplyDelete* New extreme
* Liquidity Premium - QQQ
ST:
ReplyDelete"The market is torn between good momentum and bad seasonality and indicator values (see the "Active Studies" and "Indicators At Extremes" sections below). Momentum has ruled, with a historic run since late December. Momentum looks like it's starting to wane, and typically when this occurs we'll see short-term weakness, then another attempt at the previous high, which fails. That's what we're looking for here, with the resulting correction lasting 2-4 weeks and 3%-8%."
This GRVY sure seems like it's just being accumulated. The only fly in the ointment is the RSIs are quite overbought. Valuations though suggest it should be a lot higher especially when you compare it to others in its space. Plus they have a major catalyst coming up in a week in the 2nd version of it's hit game coming to market. This was a 2005 IPO at $13 and it traded at around $7 in 2007 when things weren't as good for the company. I think with some real momo behind it then it could trade to $7 again pretty quickly.
ReplyDelete"The Fear Barometer from Credit Suisse has nearly set a record, meaning that there is heavy demand for put protection on the S&P 500. The previous times it hit this level preceded market peaks."
ReplyDelete"There have been 3 other times in 15 years that Apple stock rallied at least +2% to a 52-week high, then reversed intraday to close at least -2% lower. Each time, the S&P 500 declined at least -6.8% at some point during the next month. The dates were 7/9/98, 8/19/98 and 10/11/07. Even if we just look at 1% reversals in Apple, the S&P's decline during the next month averaged -5.2%, compared to rallies averaging +1.8% (there were 16 instances)."
"Somebody's Buying Protection
ReplyDeleteYears ago, Credit Suisse introduced a new "fear gauge", called the Fear Barometer.
We looked at this indicator on April 21st last year, which was the last time it got as extreme as it is now.
The CS Fear Barometer was supposed to supplant the VIX as a fear gauge, but it hasn't worked out that way. It behaves completely differently than the VIX does.
Even though they behave differently, it's unusual to see the CSFB nearly reach a record high while the VIX is relatively low.
This means that overall volatility is expected to be modest over the next 30 days, but S&P 500 traders are bidding up the price of protective put options relative to speculative call options.
Regardless of where the VIX is, when the CSFB has hit 29% in the past, the market has not done well going forward. Those put buyers seemed to know something."
If we can close above 13,000, I may have to go 100% out of the money puts.
ReplyDeleteI kinda like the call except I'm bullish so I don't agree with it! Seriously though if it's any index to go after I would assume it would be the QQQ
DeleteBeen reading a few things on GRVY. It is interesting. Do bad it's gone freaking vertical. I'll hope for 2.00ish.
ReplyDeleteI know man it scares me which is why I'm only holding about 10% of port. But bigger picture (monthly) this move is a blip on the screen.
DeleteThe problem with GRVY as a company is they have been working on this Ragnarok 2 for years.
ReplyDeleteThey done pre-releases and Beta's before, but then had to pull back. They have a new beta release now, and, if it is good, the stock will do great. People loved the original Ragnarok game and they still play it and sell figurines, etc.
There's probably not a lot of downside in the stock here given their good balance sheet and the excitement around the new product. I'd try and find a good source for info on how the beta is going if you can.
Yeah there is definitely risk but I've seen previews on Youtube that were put up this week and have seen confirmed emails from the company's IR saying 2/22/12 is the launch date. So it sounds for real this time.
DeleteLike you said cash on hand is quite high and a nice buffer.
ACI may not be a "better than average" coal pick:
ReplyDeletehttp://seekingalpha.com/article/371201-arch-coal-how-bad-could-it-get
jesse- If I agreed with you, I would close my positions. For some reason, I just don't think we're going to sell off hard in the short term. I think we're going to spike up hard in the short term. New highs for the DJIA and SPX are a stone's throw away- and I think it's inevitable we breach those levels.
ReplyDeleteIt would almost be a 'gestalt' move. Investors collectively buy on impulse to get us there.
ReplyDeletehttp://www.minyanville.com/businessmarkets/articles/Greek-debt-emerging-markets-collective-action/2/17/2012/id/39481
ReplyDeleteInteresting take on what is going on in Greece. If only it all mattered. I mean seriously, what is a credit event in Greece, a nation of a miniscule debt market, going to do to the US economy, which seems to be gathering steam?
Again, I think it's important to look at the impact the Japanese Depression has had on US markets since 1991. Back then Japan was on the verge of becoming the world's top superpower, and surely a crash there was going to have devastating effects on the US.
The fact is that the US leads the world. If it is doing well, the rest of the world will do well. And vice versa. I'd say that right now the US is doing well, much better than a year ago, 2 years ago, 3 years ago.
Are we gonna have pullbacks? Hell yeah. If not then I would get scared.
DeleteI looked at the chart of BTU and I see a clear series of higher lows since mid-December, unlike the charts for ACI and JRCC that had flat lows since mid-December. So I just sold at $2.47 my 10 April $12 calls on ACI that I purchased a few days ago at $1.94, and instead bought 10 June $34 calls on BTU at $4.80. Supposedly, when a sector turns around, the strongest stocks fly first, and then the crap reluctantly joins in, which is what we are seeing with the coals. Besides, I have more conviction with BTU because its is selling abroad more than half of its coal, much more than other US-based coal companies.
ReplyDeleteQID 3 day descending bullish wedge on the 10 day w/ a double bottom. Powerful pattern.
ReplyDeleteAnother reason why this market is going higher -- look at the 6-month chart of TLT. It has a clear hump shape, with higher lows and higher highs ending in mid-December and giving way to lower highs and lower lows. 116 seems to be a strong support level for TLT, and once broken, can send TLT down swiftly to 112, which would easily push S&P over 1400.
ReplyDeletecall me crazy but the market just seems to be acting much more normally nowadays. i look at the coals and JRCC is up a bit, BTU is down slightly and WLT is down big. there are divergences going on within sectors which seems to be a good thing to me.
ReplyDeleteAs I pointed out earlier, I have to conclude that I don't know crap about the market.
ReplyDeleteits very true 2nd. none of us really do. we're all guessing. it's easier to play individual stocks but even then you have crooks that are manipulating stocks like FIO on a daily basis. how convenient to be buying the crap out of options on something that expire today, then moments later having a buyout rumor floated and touted on CNBC.
DeleteFolks, just look at the 1-year chart of AUMN -- its recent pullback is surely setting up a move 30% higher in the short term...
ReplyDeleteDavid- Kass would agree. All that money sitting in bonds will eventually be shifted into stocks.
ReplyDeleteTOF- Got to agree with that. The winners and losers are trading as they should.
ReplyDeleteEven if 'cash' levels are low, the amount of money in bonds is at a record high. I would consider that money a storehouse of firepower.
ReplyDeleteWhat's more frightening- a swoosh down, or rocketing higher? I'd say going higher will catch more people off guard- those sidelined waiting for a drop (as I was), and those short the market.
ReplyDeleteGRVY- What happened the last 3 days?
ReplyDeleteYou all recall that the bulk of market gains are concentrated in a few trading days each year? I think odds are high one of those trading days will occur next week.
ReplyDeleteWith a bid-ask spread of $1.80/$2.20, just placed a buy limit at $2.00 for 10 April $7.50 calls on AUMN.
ReplyDeleteThat order just got filled -- yay! :)
DeletePut another way- we all kind of 'know' the market will eventually head to 1500. Who's to say it has to happen after a steep sell off? Why not next week? And maybe THEN a steep sell off? Either scenario 'works.'
ReplyDeleteWhen I say 'works' I mean in the sense of market frustration. Either scenario will frustrate traders. But a spike higher with few noticeable dips will frustrate the greatest number of traders.
ReplyDeleteNo, I sense many investors waiting for the sell off that 'must' occur soon. So we gap up hard Monday morning- all asset classes relevant to the bull case: stocks, gold, Euro/USD. It all gaps up Monday.
ReplyDelete"So we gap up hard Monday morning"...That would be quite the trick!!
ReplyDeleteEspecially because US markets are closed on Monday. :)
DeleteThat was my point!
DeleteWhen driving past sleepy campsites, remember to honk if you love peace and quiet.
ReplyDeleteFolks, did SORL just make a higher low at $3 after its previous low at $2.9? Time to load up on SORL? The whole sector (HAO) put in a firm higher low in late December (relative to October 4) and just broke out above its previous high in late October. SORL has the same general shape as HAO since Feb 2008 but with a MUCH higher volatility. So if you believe that HAO is in an uptrend, then SORL is the way to go.
ReplyDeleteAll of my indicators aligned at the close. Entered fully levered position in TVIX at close. My target is 30 over the next 5-7 sessions. I have no idea what "news" we could possibly have. I'm gonna try to stay away from the market this weekend. Its been a stressful week.
ReplyDeleteOh yeah, the premise is for a hefty gap down on Tuesday. I will probably sell out if there's a green open.
DeleteGoing to head out on a ride to clear my thoughts. Might join you when I get back Jesse.
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ReplyDeleteIt's always possible we have a debacle de jour after a three day weekend and I looked at all the charts on Stephen Stewart's site. We are overbought, etc etc and the sentiment is probably over done, but no one knows what will happen. Overbought often becomes more overbought and super bullish often becomes super duper ultra stupid bullish...BUT we are pushing up against multi-year highs (the spy) and we gave up a whopping .31% of the QQQ's today. The SPY has air above the 10 dma and everyone is looking for the big pullback. It's hard to tell who has a seat or where they are and I can still hear music.
ReplyDeleteWho knows? I'm just using the dumb 'let the market decide' system and the big blue arrow is still pointing to the upper right. http://screencast.com/t/RKIf9EdzWAq7
Maybe a trade going short...a guy that just tripled his port on a crazy ass options trade on FSLR can afford to fuck around going a little short and an even nicer bottle of Ecuadoran rum.
I just follow the blue arrow. Hell, the last few days the SPY just came down and slightly crossed the 10 dma and you would have thought it was the great depression and the end of Europe by how everyone (well nearly everyone) reacted. Me? I'm glad it's Friday. I'm going to have a nice dinner and some rum too. Not Ecuadoran but something from the Lesser Antilles. It will be nice to have Monday off. I'm gonna relax, maybe read and do a little yard work. Peace out for now compadres.
I love the back and forth fellas. In one corner we have Jesse the Cowboy fresh off a monster gain and looking for even more, unwilling to rest on his laurels (can't say I haven't done that before...).
ReplyDeleteIn the other corner we have 2nd the Newly Reinvigorated Bull + David the Inflationista + BB our Northern Partner. Who will win?
Hopefully all of you. I'm now 100% long and about 50% there mentally as far as committing to buy and hold. But either way, I'm rooting for a nice moderate gap down on Tuesday so Jesse can cash in and then a continuation of the bull trend.
Either way I agree we're going to 1,500. The stocks I own (WFR, NLS, IMMR, GRVY) are all pretty much in the same category:
*Multi year downtrends that seem to have finished their selloffs
*Stocks that are beginning to rally off massive downturns
*At least short term basing patterns.
*Probably short term overbought
However, I can't ignore the Livermore quotes we shared earlier in the week. "It's a bull market". In my mind the stocks I own are going way way higher longer term. "If I sell them now then I'll lose my position."
MSG - Has the enthusiasm over basketball begun to display some cracks?
ReplyDeleteA tuba placed prominently on your pick-nick table will keep the campsite on both sides of you vacant all weekend.
ReplyDeleteCP i'll be the first to admit i don't understand half of the humor you post. if you can correlate it with maybe the book value of a tuba, the projected future growth rates of the tuba, or perhaps the near term catalyst of the tuba, then my dull skull might pick up on it.
DeleteEnjoy your long weekend, fellas!
ReplyDeleteInteresting chart: http://www.ritholtz.com/blog/2012/02/rallies-following-30-bear-corrections-1900-present/
ReplyDeleteThen there is this:
http://www.ritholtz.com/blog/2012/02/heads-up-i-am-traveling-all-of-next-week/
I'd say the chart is more meaningful.
I see Doug Kass is working overtime coming up with reasons to support his newfound bearishness on the markets...here they are in no particular order:
ReplyDelete*The Nasdaq is forming the dreaded Three Peaks and a Domed House pattern
*There is a workplace auditor that found ‘TONS OF ISSUES’ AT APPLE MANUFACTURER
*The yield on one year Greek paper is now 630% - today's rate rise the highest in history.
Three peaks and a domed house? Crap! Is that more or less serious then three birds on a wire with one poopy diaper? Where do these guys come up with the crap?
DeleteThose people at the aapl factory have been throwing themselves out of windows and drinking cyanide for years and no one with a iphone, ipod or an ipad seems to give a rats ass. And Greece? My advice, don't take Greece to a debt fight in this country (knife to a gun fight, get it?). Greece is pocket change here!
TOF - When camping, eat a live bug first thing in the morning, and nothing worse can happen to you for the remainder of the day.
ReplyDelete:))) Your on a roll!!
DeleteBB - I have the following comment from Benzinga on my TD Ameritrade App:
ReplyDelete"Gravity (GRVY) Co spikes higher on Facebook launch. Games will launch on Facebook later this month."
REGN, GILD = Wtf. I shorted those pigs and closed with small gains. I actually had about $1k puts on GILD ($55 strike that I closed for a whopping $50 gain). Had I had the balls to hold them I would have made a 15 bagger.
ReplyDeleteJust received a rare Friday night Sentimentrader update. I'll share it before I take a break and enjoy Carnival for the next 3 days. And I see that AAPL was "upgraded" again after the bell on a Friday (??). I don't ever remember seeing that. Very suspicious. I also see SPY up .33 after hours, above the day's high. This is exactly the kind of euphoric set up I like to see heading into a long weekend. Given all that, TVIX is up AH which is not normal.
ReplyDelete"Black Swan Risk Intensifies
Earlier this week, we looked at the CS Fear Barometer. This alternate gauge of options traders' uncertainty shows that S&P 500 traders are bidding up the value of put options.
While that sounds like it should be a contrary indicator, it's not. This has proven to be the "smart money". When the CSFB hits a high while the "common man" VIX is pricing in low volatility, stocks usually tumble afterward.
Disturbingly, the VIX has crumbled 15% in the past two days, while the CSFB just hit a new all-time high. In other words, traders are paying a record high amount for 3-month protection.
Also concerning is another black swan-type of indicator, the SKEW index from the Chicago Board Options Exchange.
From the CBOE:
The CBOE Skew Index is an option-based indicator that measures the perceived tail risk of the distribution of S&P 500 returns at a 30-day horizon. Tail risk is the risk associated with an increase in the probability of outlier returns - returns two or more standard deviations below the mean.
At a normal skew level of 100, the probability of a black swam event during the next 30 days is 2.3%.
But the latest value of the SKEW is 130. At that level, the probability of a black swan event is 10.4%.
My math may be a bit off here, but the VIX is suggesting that the S&P 500 shouldn't move more than about 5% over the next 30 days.
But the SKEW index suggests that there is more than a 10% probability that the move will be greater than 10%."
I've been as bullish as I've ever been in my career, but the stars may be aligning for something big on the horizon. The Fed wants QE3 but needs a crisis to gain public support. I can envision an enormous drop (12-15%% or so)followed by a V rocket right back to where we are now due to a BS QE3 announcement (I have no earthly idea why they need or want it).
DeleteI'm betting that the majority of non traders / i.e., the public will go home over the long weekend, read the financial news headlines, notably that the markets are on the verge of or in the midst of breaking out to multi year highs, that the unemployment situation is getting quite strong in the US, and maybe even read that the industrial production and ISM reports are doing very well, and that Europe is on the mend and have a long hard look at their portfolio and the negativity they have been mired in for the past 3 years...
Deleteand then they will have a long conversation with their significant other how they are starting to see real life signs that things are improving. they go out to dinner and see the restaurants packed (i went out to little italy last night in san diego with a family friend and each restaurant we tried to get in was jam packed and we had a 30 to 45 min wait on each...anecdotal i know, but still i haven't seen it like that on a thurs in a while), they go to the mall to catch a movie and see the parking lots full...then it comes time for the dreaded monday afternoon look at their retirement projections. after an hour or two it settles in that they're stuck in a negative rut fueled in part by the media and they come to the conclusion that the bond funds and low risk funds they're overweight on just ain't gonna get it done for their retirement goals.
Beer of choice: Newcastle Brown Ale.
ReplyDeleteCouple more pieces of anecdotal evidence things are continuing to improve:
(1) My wife's dad just landed several big wins in hotels in his energy management / HVAC business. They have been on the verge of bankruptcy for 4 years, basically praying that big orders would come through and barely getting enough to get by. Now he has a bunch of money coming in and he called me to talk about what to do with his money.
(2) My family friend, basically my godfather, was out here last night on a biz trip. He is somewhat on the pessimistic side of things when it comes to our economy. For work he travels a lot and last night he commented how he is seeing sure signs that things are improving, which is the first time I have heard him be positive on the economy in several years.
What will the market do next week? Who knows man. I sure hope Jesse is right and things open down for him on Tues. That would be great to see that and give him a good chance to profit. But I still think things are on the mend and ultimately we're going higher. The earnings are there to support the market at 1,500 or 1,600. It just takes people being willing to pay up more for companies. I think that is a process that is early in the going. Most people / traders are still cautious and think things have run too much. They're waiting for pullbacks and even betting against the market. Their argument is that the S&P is only expected to grow earnings 1% and when asked where higher growth might come from they said they just don't see it...that companies have pared down as much as they can. Yet they fail to mention that the jobs market is improving quite a bit and those newly employed people will be generating additional demand that will ultimately lead to higher earnings.
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