Saturday, April 5, 2014

4/5/14 Slope of Hope

Friday's employment numbers were widely hailed as 'Goldilocks:'

http://www.businessweek.com/articles/2014-04-04/march-jobs-report-not-too-hot-not-too-cold

Not exactly how I would characterize market reaction to the news, which I take to be a warning shot across the bow.  Markets (in the US) have climbed a wall of worry for >5 years, rallying in the face of bad news.  Selling on good news represents a marked change in temperament.

(a) I've been bullish on Emerging Markets since late 2013, and remain bullish for the intermediate term.  However, traders who bought the Friday morning rally in EEM (and especially EWZ) are likely to be punished.  We'll see.
(b) Q2 earnings season begins in earnest next Tuesday.  Investors who blithely dismissed profit warnings issued in Q1 may suddenly decide that the warnings are worrisome after all.
(c) It's always hard to discern when markets transition from a 'wall of worry' to a 'slope of hope.'  However, seasonality favors a correction (2013 notwithstanding).  April tends to be strong, at least through mid-month (many investors wait for the period leading up to April 15 to fund individual retirement accounts, leading to cash inflows which must be invested).  We all know what often happens in May.  I prefer to be positioned in cash while awaiting this year's outcome.

220 comments:

  1. From the JPM document TOF posted (http://issuu.com/inst_insrd/docs/q2__14_jpm_guide), lots of great info.

    You just have to be careful interpreting some of their things. For example, it appears growth stocks and, in particular, large cap growth stocks are the cheapest relative to their history, but that is more because they were so overvalued in the late 1990's, not because they are cheap now (in my opinion).

    But in general, not much to worry about. Stocks are reasonably valued and the economy is improving. The only thing that popped up to me as a risk is the high level of government debt may cause distortions in the market
    .

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    1. That's the major unknown - government debt. I subscribe to the theory that the black swan could come in the form of a currency crisis. I'm significantly more cautious than I have been in 6 years primarily because I think there's a chance the dollar spikes and has significant unknown effects on other currencies. I think the US can survive fine in a strong dollar environment, although I think US earnings would be capped for a while possibly leading to a sideways market for a couple of years...potentially longer. But the emerging markets should do well longer term in that scenario because their goods become cheaper to the US market. Larger cap companies that are reliant on exporting their products to other countries would have a headwind against them.

      Of course, this is all theory in my head based on charts and what I see going on with QE here relative to the rest of the world. I think this is the primary reason why markets have stalled out.

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    2. I've managed to cash out of the market twice right around the peaks in 2000 and 2006 (my timing was pure luck) to work on starting up 2 businesses. So in 2009 I started with next to nothing and grew it way beyond what I would have imagined back then. I've spent a ton of time thinking about the bigger picture the past month primarily because I want to protect my gains over the past 5 years. I don't really see this big swoon in the markets that some people are calling for but I do see a rough investment period for at least a couple of years. I think it's vital to switch tactics in the market when things have changed. Like 2nd's opening comment says, it's a marked difference that the market is no longer rallying on good news. Why is this? My guess is good news = Fed getting out of QE and that really goosed things for a long time. Who really cares why though? The odds favor the game having changed. So I think we need to look at what worked the past 5 years and throw that out the window. It's time to change our approach. In 6 months' time the Fed will no longer be supporting the market. I'm assuming that the economy should be ok…probably the same as its been. But the animal spirits will be gone.

      I think we could see a market much like the 2nd half of the 1940's. The market rallied significantly from 1942 to 1946 on the back of huge war time spending (not unlike huge QE). When the war was over, the market ran out of steam, dropped 20% then traded sideways for 3 years. With the Fed getting out of QE I see the exact same thing setting up. So the difficulty in my mind is how do we invest in this scenario? What is the probability of this happening? Those are very important things to think of. I think it's wise to look at what performed best over the past 5 years because this, in my opinion, is definitely an area to avoid. It will lead to max frustration if you invest in this area.

      Did you know the S&P 500 can be split up into 2 categories: high quality vs low quality? "The S&P Quality Rankings System measures growth and stability of earnings and recorded dividends within a single rank. Scores have been calculated on common stocks since 1956. S&P 500® Low Quality Rankings are designed for exposure to constituents of the S&P 500 identified as low quality stocks - stocks with Quality Rankings of B and below." Look at the performance of the two categories over the past 5 years:

      High Quality: +138%
      Low Quality: +208%

      So low quality is probably the area to avoid. You can find a list of the high quality names here:
      http://us.spindices.com/indices/strategy/sp-500-high-quality-rankings-index

      Click on "constituents" tab and view the full constituents list (it will export it to excel). I've been looking into this list of companies. Lots of good ones there like AFL, DE, MAT and some others. I think its probably a decent time to consider these companies on pullbacks. I'll be looking at these. I also mentioned Russia, China, and France as the cheaper markets per JPM. Those might not be bad places to look too if you can get past the country risk.

      I also think UUP should do well over the next 6 to 9 months. Anyway, I think it's time to change up the game.

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    3. Interesting and thoughtful analysis TOF.

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  2. So far in looking at that list, these are the ones I like the best just in terms of most consistent / strongest financials...I haven't looked at valuations closely:
    AFL
    BAX
    CHRW
    DE

    It's amazing how much all of these companies have increased their dividends over the past 10 years.
    AFL - $0.38 in 2004, $1.42 in 2013
    BAX - $0.58 to $1.92
    CHRW - $0.26 to $1.40
    DE - $0.53 to $1.99

    For example if you invested in BAX in 2004 you would be making 7% in dividends now on your initial investment.

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  3. Talking to 2 large cap value investor friends (think Pfizer, BP, BNS) and they are both loving, and I mean loving, the current environment. They thought everyone is doing great and almost didn't believe me when I told them about the momo and biotech stocks getting crushed the last month.

    Fits in well with my thoughts on market rotation and also lines up with TOF's research on high versus low quality. We did see something similar in 2004 or 2005 in the last cycle.

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  4. Google "Nasdaq Dives as Investors Bolt for Value Stocks" for a pretty good summary of what is happening in the markets.

    Dow and S&P were actually both up half a percent last week.

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    Replies
    1. Or look at http://www.crossingwallstreet.com/archives/2014/04/the-growthvalue-divide-continues.html

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  5. Eddy Elfenbein has had AFL of his buy list for years if you want a steady large-cap. I've looked at it, but prefer MET because of the lower valuation and unrecognized Asian exposure (more upside). And NWLI of course because it is so undervalued and well-run.

    ===========================

    Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 for the last seven years in a row. (more)

    http://www.crossingwallstreet.com/buylist

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  6. Just wondering, so now does everyone running for value stocks arrive just in time for the distribution? I mean, they've been handed a tremendous beating as the momo lost it's mojo, BALT seemed like a momo stock for a while there and I'm unconvinced it doesn't have more upside but with the "coal is dead" theme it seems dry bulk market dynamics have shifted. Yeah, I guess fundies may not count for much when it comes to price action? The grand opening of the improved Panama canal could light a fire under US coal producers?

    Except, it seems China has found a way to consume Mongolian coal, why not colonialise instead of buy energy?

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  7. Molybdenum - Have you guys been keeping an eye on moly prices? I haven't, b/c it seems there's plenty of supply but that can change? Anyway, I can't help but wonder if moly doesn't play a key role in meeting vehicle fleet mileage requirements. Surely, synthetic lubricant technology has already helped, I'm pretty sure, but maybe moly can extend the results?

    Or maybe just a momo play of some sort that has died, but Hanlong and PKX(still) have shown financial interest, what did they see in it?

    http://www.bobistheoilguy.com/moly-basics/

    And there's this aside:
    "BOJ Seen Doubling ETF Purchases in Next Round of Japan Easing
    Japan’s central bank will probably double purchases of exchange-traded funds in a second round of monetary easing under Governor Haruhiko Kuroda anticipated in coming months, a Bloomberg News survey of economists shows. While Kuroda pointed to the equivalent of trillions of dollars of financial…
    Bloomberg29 mins ago"

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  8. How about buyouts, are some of these beat up momo stocks being targeted for buyouts in the near future, and are being shorted to dirve market cap down ahead of buyout offers?

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    Replies
    1. Now that's the kind of Machiavellian explanation we thrive on! Good thinking, CP.

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  9. Here's the 'other side' of the sentiment story, and why we will eventually hit new highs:

    http://www.ritholtz.com/blog/2014/04/barrons-unsentimental-investors/?utm_source=dlvr.it&utm_medium=twitter

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  10. Either the momo stocks keep their excitement and bounce soon, or they are in for a long fall in time and price. I personally think they are done for 2014.

    Look at the 5 year charts on stocks like TSLA, NFLX, etc. and, even after their 20% drops, they are still far nearer their highs than their bottoms. Plus, once a stock loses momentum, it typically keeps dropping until some investors see enough value to buy. Momentum guys won't step back in until they bottom. It doesn't have to be the under-BV, P/E less than 10 value guys, but more the Growth at a Reasonable Price guys will step in at some point. Look at NFLX 80% drop in 2011.

    You can still find value stocks at good prices, plus with a growing economy, they should grow earnings over the next few years as well. Every stock is different, but many of these value stocks are still far from prior valuations, so a lot of these are far away from distribution time.

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    1. Actually, I should correct this. I think the most of momo stocks from 2013 are done and will be sold all year.

      But there will be a new group of momo stocks for people to jump into.

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    2. More details on the issues momo stocks face:

      http://finance.yahoo.com/news/momentum-names-may-see-more-010804937.html

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  11. CP, re moly, I haven't researched it, but it's my understanding that it's one of those metals that is almost always cheap and the price will languish for years, but then gets a price spike once in a while. So probably not easily investible unless you have a price spike or get a really good mine.

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  12. Re NGas.

    http://americanresourceboom.com/boom-blog/159-russia-america-and-natural-gas-part-ii

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  13. Regarding Sentiment: I think it's a mistake for people to only refer to the 1999/2000 top as the extreme sentiment case in explaining why we're nowhere near a top. That was a unique once in a lifetime bubble (last one being 1929). In other tops like in 1980 the Univ of Mich sentiment readings were right where they are now. The market then dropped about 30% over the subsequent 18 months, setting the stage for a huge bull market. Not many people talk about that because they assume stocks never made new highs...not true. The 1980 peak in the S&P 500 was about 18% higher than the 1973 peak (not much different than today as well). So yeah sentiment is down in the dumps relative to 1999. But so too, I'm assuming, was 1980, 1973, 1946, etc. Also, let's not forget these things:

    High School traders being featured on CNBC lately
    "Fox on Stocks" featured on CNBC
    Highest ever valuations in small caps
    Goldilocks phrase being used more frequently to describe economy/markets
    General outward mocking of bears and bear market parallels (ie 1929 crash, etc)
    Roubini bullish on stocks, no downward targets for S&P 500 by major analysts

    So consumer sentiment could be weak but trader sentiment isn't.

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    1. I really don't see sentiment as an issue at this time. Maybe in some of the mo-mo stocks, but not in the overall market.

      IF the economy keeps coming along, the stock market has not attracted so much excess that a major correction would be needed to offset this.

      If we get a bear market at this time, I think it would have to be fundamentally driven and involve either something like a government financing issue (but these seem to be declining) or something unexpected like Iran dropping a nuke in a major city or the Russia/Europe issue escalating.

      If you look back at the 1980's recession, the economy was bad, sentiment was already in the toilet because of this and then Volker raised rates to stop inflation causing a major recession and hitting stocks. So it was a bear market driven by completely non-sentiment reasons.

      In fact, if I was to guess, I bet that sentiment is not a good predictor for the next bear market. It seems like anyone and everyone is using sentiment now, so it's ability to surprise and drive traders will be limited.

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    2. I suppose you could argue that the economy is bad now as well. Nominal GDP has grown about 15% in the US since the last peak:
      http://useconomy.about.com/od/GDP-by-Year/a/US-GDP-History.htm

      Whereas from 1973 to 1980 GDP grew a lot faster - more than double. Back then raising rates to stop inflation caused a 1.9% dip in total GDP. Maybe cutting stimulus fuels the same issues? Would be interesting to see if that happens because investors have been conditioned to think that the economy has weathered tapering fine.

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    3. Sorry meant to say from 1973 to 1980 GDP more than doubled in 7 years. The past 7 years have seen GDP only rise about 15% in nominal terms.

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  14. From CNNMOney:
    Brace yourself for ugly corporate earnings
    http://money.cnn.com/2014/04/06/investing/stock-market-lookahead/index.html?source=yahoo_quote

    Such a negative headline and spin on things, but if you actually read the details, earnings are expected to be down due to weather issues and exchange rate changes - not a real compelling reason to sell a stock

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    1. I actually read that weather as a whole for the entire world was higher on avg this winter vs last year. It was primarily 2/3 of the USA that was hit hard

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  15. Correct, concerning moly BB, was simply contemplating what might happen if/when it's blended in motor oil to meet EPA and fleet mileage requirements. It probably wouldn't be quantity though, probably wouldn't be a good idea to have more than a few grams or less.

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  16. You guys that follow F should know this: do they still have big pension liabilities? What does it look like going forward? Reason I ask is I think it looks like a buy.

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    Replies
    1. Higher rates should relieve some pension liability pressure.

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  17. CIG - Quite a move for this Brazilian stock as well.

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  18. Looks like I'm the only one interested in KFX?

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    Replies
    1. Dude sorry meant to get back to you on this. Haven't had a chance to look further

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  19. per UBS

    Biggest Inflow for Dedicated GEM Funds Since January 2013.
    Following a record 22 straight weeks of outflows, GEM funds reported inflows of $2.5bn last week, the
    first inflow since October 2013. Dedicated GEM, LatAm, and EMEA funds saw inflows while outflows
    continued for Asia ex-Japan funds. The inflow into dedicated GEM funds ($3.1bn) was the biggest such
    inflow since January 2013. The four-week moving average flow for dedicated GEM ($62mm) and EMEA
    ($52mm) funds are positive, but 4-week moving average flows for Asia ex-Japan (-$1.0bn) and LatAm
    funds (-$105mm) remain negative.
    Inflows Dominated by ETFs
    ETFs reported an inflow of $2.37bn last week, accounting for 95% of the total GEM inflow, and was the
    biggest inflow into ETFs in 29 weeks (since September 2013). Non-ETF (Long-Only) flows turned positive
    with inflows of $125mm. Year-to-date, cumulative outflows from ETFs have been greater both in
    absolute terms ($17.0bn) and as a percentage of AUM (6.1%), compared to non-ETFs ($16.1bn, 2.9%
    of AUM).
    YTD Outflows ($33.2bn) Still Double the Size of 2013 Outflows ($15.9bn)
    Through the first thirteen weeks of 2014, outflows from GEM funds have totalled $33.2bn (MSCI GEMs
    -0.3% YTD), roughly twice the outflow reported during all of 2013 ($15.9bn). During the record 22-
    week outflow streak, outflows totalled $51.2bn (6% of AUM). However, on a cumulative basis since
    January 2006, approx. $140bn has flowed into GEM funds.
    Country Positioning Scorecard
    Last week, all countries saw inflows with Brazil and India reporting the largest inflows. The most
    crowded markets based on our positioning model (i.e. above average investor weights relative to the
    MSCI GEMs index) are Colombia, South Africa, Korea, the Philippines and Indonesia. The least crowded
    markets are Russia, India, along with the CE3 countries.

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  20. TOF,

    I didn't realize economic growth was actually that good in the 1970's.

    But the real big different in the 1970's to now was how inflation went up so high, and then interest rates followed and people didn't buy stocks because you could invest in a 5 year guaranteed certificate and get 12% or something like that. People like my parents never bought stocks because they could get good returns with no risk. That really pushed down the P/E people were willing to pay on stocks. In Canada now, you can get 2.5% on a GIC, so no competition to stocks until rates move a lot higher.

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  21. If you want to play a potential new momo stock, take a look at FLY in Vancouver. They do wireless transmission of blackbox data right from the plane in flight. They are getting a lot of interest with the Malaysian crash and were written up in Reuters this weekend.

    Too expensive for me at 10+ times sales, and it's tripled since last summer, but at $0.70, it's the type of stock that could really get moving in the current environment.

    https://ca.finance.yahoo.com/q?s=FLY.V%2C+&ql=0

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  22. Surprisingly to me, real estate is having a great year so far:

    "As we began the 2nd QTR last week, stocks around the globe rallied, while Real Estate continued its run, now up 11% for the year.
    While REITs as a whole are up 11% for the year leading the major asset classes, the Residential REIT segment is really on fire this year, up almost 15%."

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    Replies
    1. I know it's not the same, but i've noticed something interesting. There are a lot of homes near I live that are valued on Z at about $650,000. They are pretty much all selling for around $750,000.

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    2. My first home in San Jose was 950 square feet and now listed value is $750k

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  23. BSBR - Wow, it's so refreshing to own something that goes the other way when the US market is weak.
    NLY - I dunno how far this one can go up, who am I to argue?

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  24. Replies
    1. How about $35?

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    2. $35 would be quite some haircut! :) Never say never.

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    3. There's a gap to fill down there! Seriously, though, there's not much consistency in these earnings over the years:
      http://www.gurufocus.com/financials/RH

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  25. I picked up some GLL this morning. Still think we see a bigger drop underway for the markets and that would be bearish for gold. Also still researching some high quality stocks for longer term entries. Remember this one: FF? Future Fuel. Looks pretty good as well on weakness.

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    1. Longer term downtrend in Gold should remain intact; however, I think I picked the wrong entry. I think a better entry would be a retest of the recent highs...maybe it spikes up on a panic selloff in the markets. I think gold should head below 1,000 eventually.

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    2. Have you been reading Mort Zuckerman again? (BXP)

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    3. Why is he bearish gold?

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    4. Well, he hasn't mentioned gold that I know of, but he's been warning of a Chinese slowdown for some time now and lately he's warning of global slowdown (most recently Friday).

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  26. Has the internet made us all dumb(er)? Children under the age of 2yrs should not be allowed access to the internet researchers say, the reading comprehension developmental process is stunted.

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  27. KING - This one's back to cheap again, today. :)

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  28. Nasdaq and IWM down more than the Dow and S&P again. Same for IOO (global 100) dwon less than 0.5%.

    Momo's like TRIP, PCLN down again.

    EWM, TUR, EWZ all up again.

    And adding to this theme, real estate oriented companies like NLY and ABR, which I own, up today.

    Seems like the rotation out of high value techs and momo's into value, EM's and Real Estate is still going strong.

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  29. I think what you are seeing with real estate Mark is more up-to-date than Zillow - Zillow is based on filings and you are seeing the live transactions. Bodes well for further increases in real estate pricing, but also stocks.

    The good thing is we are not hearing about the strength in the real estate market on CNBC or the broad press in general. Probably still a good time to look at some of the stocks.

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    Replies
    1. At least out here...I think real estate is way too overpriced.

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  30. FLWS - I'm thinking this one needs to close better than $5.39 today, this would be nice to see happen but perhaps too revealing.
    GMO - Not doing so well.
    PAL - Even worse than GMO

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  31. WTF I swear Jeff Saut is reading our posts:
    http://www.raymondjames.com/images/inv_strat/140407_2lg.gif

    This is a chart of BID vs the S&P. I mentioned this a week or so ago because BID tends to drop right around when the market drops. Saut says because the market hasn't dropped then it's not a peak for BID. Maybe he's right but it's worth remembering this correlation. I don't think it's that much of a stretch as the art world is aided by a rising stock market/economy.

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  32. I think it's interesting that there has been 1 post on the ultrashort gold board in yahoo since last May:
    http://finance.yahoo.com/mb/forumview/?&bn=2740fdfa-07d3-3fd4-ad35-77d135b08ee8&f=0

    Volume is down to around 80k shares a day on GLL while it was as high as 4X last year. Not saying Gold crashes from here but I definitely don't think a bottom is in.

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    Replies
    1. Something to keep an eye on for sure I think. If Gold can rally to near recent highs might be worth trying it from the short side.

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    2. I think ~$1318 is the resistance?

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  33. Just another garden variety 5% pullback. Nothing to see here. A buy the dip opportunity...just don't look down from the peak of the 5 year hill to see how far you can fall :)

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    Replies
    1. This seemingly outsized gain is what makes me think the global economy is on the verge of a breakout, in keeping with the forward-looking theme. Could be it was all an elaborate illusion.

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    2. Only a 2.5% pullback on the SPY so far.

      We eventually will get a big correction. I just don't know why it happens at this peak when it didn't happen at the other 6 peaks from the last year.

      I think we need something unexpected to cause it, not just an overdue pullback in overpriced momentum stocks.

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  34. Americans buy 500,000 plastic water bottles each week.

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  35. 2:45 - maybe margin calls are done for the day, so we can bounce here? (just a guess)

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  36. Bespoke saying average stock now down 12% from its 52 week high, but market down 3%:

    http://www.bespokeinvest.com/

    I guess different stocks peak at different times, but that is surprising.

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    Replies
    1. It's a bit hard to tell with TD unless I do all my spreadsheets, but i'm pretty sure my personal portfolio is down less than 1% from its high.

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  37. Just noticed FIATY is up over 50% since December to $12 - another one that got talked out of buying by analysts.

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  38. I closed out of the GLL position for a 0.5% gain. Figured I have a better entry point on a spike up in Gold.

    Also bought back into TZA at $17

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    Replies
    1. Sold TZA at $17.08. Hoping we get a bounce tomorrow. I doubt it but maybe they bounce it weakly.

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    2. With that broad, eight cents is a victory!

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  39. AMNF has had a 10% pullback to $1.80, but trading at 17 times 2013 earnings - that's too high for a small Pesto company.

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    Replies
    1. Yeah I was looking at that one over the weekend. Not really in value territory.

      Delete
  40. THRM - This one's finally coming off. They make the armrest heaters used by Mercedes in their sedans

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    Replies
    1. This used to be called Amerigon. At one time I held that stock only because a hedge fund I worked with had a big position and after reading into it the stock looked cheap. That was around $10 I think.

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    2. they're the technology behind heated seats actually. the technology is being tested in a variety of areas including heated coffee cups etc. their technology recycles the energy generated by the engine i believe if memory serves me right. very interesting company.

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  41. S&P and Dow catching up to the Russell and Nasdaq now. Down 1%+ each with Russell down 1.5% and Nasdaq down 0.8%.

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  42. BB - AMSFL is an interesting one. I can't quite seem to pull up their balance sheet though. the other concern is getting in without pushing the price up significantly.

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    Replies
    1. Sorry...AMSLF. The Fly company

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    2. Yeah, I know. Their official filings are at www.sedar.com (it's like the SEC Edgar for Canada).

      It's been around for a while and gets hot at times. But you sure could see how this could take off if you get a couple of hedge funds piling into it.

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    3. Yeah I really like the idea. I always wondered why they had to rely on black boxes for everything. I see it's patent protected. Not sure how that holds up in court but helps perception wise I think.

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  43. So true:
    http://www.gurufocus.com/news/254418/win-at-investing-play-moneyball

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  44. Holy ----. Remember James River? JRCC.

    http://www.marketwatch.com/story/james-river-coal-files-for-chapter-11-bankruptcy-2014-04-07-18485718?dist=tbeforebell

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    Replies
    1. Not unexpected though. It's only a matter of time for the rest.

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  45. I don't know about y'all, but I'm turning bullish on US indexes. Especially the NDQ.

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    Replies
    1. Dip buyers need to get taken out first IMO. This is only the 2nd day from all time highs

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    2. J6p has been buying ie dip buyers

      https://imx.tdameritrade.com/IMX/index.jsp

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    3. Full disclosure I bought a bunch of tza ah at 16.93 so I'm biased

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    4. Turnaround Tuesday tomorrow?

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    5. I'm prepared for a gap up dude

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    6. I'm hoping for another gap down to buy into.

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    7. That would fit in well with what I did 2nd. I saw some significant dip buying and was listening to a trader show where callers called in saying they were buying dips in lnkd and a few others. They went home green and are thinking they caught bottoms. Kind of makes sense there's a gap down then to put them on edge

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    8. Or perhaps a gap up that evaporates quickly

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  46. New Zealand wasting no time taking the elevator down.

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  47. GIMO- Below it's IPO price AH's.

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  48. IMH - P/S is 0.32, Volume today
    ARO - Well, maybe we get to see this one go even lower...
    YRCW - On a quick test of the 200SMA?
    GSS - This miner wasup?

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  49. JRCC - Coal sector unlikely rally tomorrow?

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  50. Z - I dunno, sorta looks like shorts were covering today?

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  51. Hardest trade has to be short right now

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    Replies
    1. Yep. Today was pretty interesting though. Rally to about even near the open then another tidal wave of selling. BB's comment about margin selling rings true to me.

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    2. I just checked our numbers through Q1 for our furniture business...we are down 50% year on year in total sales. I have asked around to our suppliers to see if they're seeing similar results and a few of them have mentioned that it's been really slow. I just looked at the charts of PIR and ETH...horrible. Makes me wonder if there is something weird going on with consumer spending. Since January I've wondered if Obamacare is having a big impact on spending. Maybe the weather cover up was the ultimate cover? Maybe it's just relative to our industry? Not really sure but it's really surprising how slow our business has been this year.

      Delete
    3. Must be something other than Obamacare to be that big. They only enrolled 7 milion people.

      Not sure where your client base is, but in the Northeast could see weather as an issue as you would not want to be moving furniture around in the weather we had.

      Delete
    4. Guess they even had a bad enough ice storm in Georgia to knock a bunch of trees down at the Masters this winter.

      Delete
    5. We are Internet based so weather really shouldn't be an issue. We are small though so could be anything. But we have been around for 13 yrs so for biz to just drop off like a cliff is unusual.

      I'm not really referring to enrolled people just overall premiums going up. Everyone I know has seen fairly large increases

      Delete
    6. Has the yield curve been flattening, a harbinger of economic slowdown?

      Delete
  52. China gaps up.
    Brazil continues to gap up.
    EEM gaps up.

    All three are now officially off limits for me. Chase? No way, Jose.

    Thought about miners near the close yesterday. Should have taken at least a small position.

    ReplyDelete
  53. Yesterday

    Putting all the indices on the same valuation system the net results looked like this: Russell -250; Dow Transports
    -223; Nasdaq Comp -190; S&P -177 and the Dow -166

    ReplyDelete
  54. We're only 2.3% off the YTD highs in the DJIA.

    ReplyDelete
  55. TUR - Danm, I sold this one way too soon....

    ReplyDelete
  56. Nice gap down in UUP. Fake out or break down?
    Interesting day.
    Shorts up, longs up. Crazy.

    ReplyDelete
    Replies
    1. Yeah the dollar took it on the chin from the Japan monetary meeting. I think it's a buy and a half.

      Delete
  57. I had a busy morning. Sold the TZA at $17 pre market, then bought it back at $16.92, then sold it at $16.99, then bought it all back around $16.7. One of the rare times when trading TZA worked out each time. In fact, it's been working for the past few weeks.

    ReplyDelete
  58. I don't now man. Turnaround Tuesday might be to the downside.

    ReplyDelete
  59. ANR/BTU/ACI - LOL, of course, but where to now?

    ReplyDelete
  60. Canadian dollar may have bottomed, it's been gaining for a few weeks now?

    ReplyDelete
  61. Sold 1/3 of TZA at $17

    ReplyDelete
    Replies
    1. Sold the rest at $17.01.

      Delete
    2. Now the market tanks, of course!

      Delete
  62. Bank of Japan is playing chicken with the market is my take. I think the dollar reverses. Gold too. However, Id have to imagine gold tries to retest recent highs first.

    ReplyDelete
  63. http://www.cnbc.com/id/101564158#_gus

    Kinda interesting.

    ReplyDelete
    Replies
    1. This is what I'm hearing from my old co-workers in the hedge fund biz. A few of them got crushed.

      Delete
    2. Where was the 'hedge' part?

      Delete
  64. What happens when "Sell in May" seasonality begins?

    ReplyDelete
    Replies
    1. We'll probably be near a bottom by then.

      Delete
  65. I'm going to keep an eye on todays highs. I think tomorrow is a range bound day like today...with lows being capped around yesterdays lows.

    ReplyDelete
    Replies
    1. I predict that I won't know what happens tomorrow anymore than I did today. I thought we were due for a bounce and once again I was proven wrong.

      Delete
    2. I'm looking for a retest of the 1,080 level for RUT.

      Delete
    3. Wouldn't be surprised if things are frustrating for a week or two...false breakouts and breakdowns. Shorts and longs give up, then move happens.

      Delete
  66. Long GLL at $85.8

    ReplyDelete
    Replies
    1. Just thinking if the dollar rebounds from here that would be negative for gold. I'd like to buy the dollar but there's nothing exciting enough to play that. UUP is dull at best.

      Delete
  67. Wow, I didn't realize TWTR had come off so hard. Not much above the lows.

    ReplyDelete
    Replies
    1. Yeah I've been watching them closely. LNKD up big today. I had an order in for LNKD right before the close yesterday but it didn't get filled. Probably going to bounce to the lower trendline today.

      Delete
    2. Scary market cap, hard for me to buy but probably should.

      Delete
  68. 4/8/14 - "BERLIN — Chancellor Angela Merkel's cabinet approved on Tuesday a reform of Germany's renewable energy law designed to curb a rise in the cost of electricity in Europe's biggest economy driven by the rapid expansion of green power.

    The reform will slow the growth of green energy, which accounts for 25 percent of Germany's electricity, and force new investors in green power to take some risk.

    Although some industrial companies will have to pay more for power in future, the sector has managed to hang on to many of the benefits it says it needs to stay competitive. Household consumers, who have among the highest electricity bills in Europe, are likely to see power bills rise at a slower pace."

    ReplyDelete
  69. New Hampshire - Moose population is in rapid decline due to warmer winters, tick infestation is believed the responsible culprit. Talk about keeping your wig warm.....

    ReplyDelete
  70. Someone sold $20,000 worth of AMSLF and dropped it 18%.

    ReplyDelete
  71. Offing the TZA at $17 was a great move, TOF (I say this on hindsight of course!)

    ReplyDelete
    Replies
    1. Yeah looks better now. I really don't have a ton of conviction here with anything so just day trading a few things here and there. Still researching the "new" portfolio (i.e., high quality big caps).

      Delete
  72. YHOO - Found buyers under the 200SMA, looks like. LNKD - Zippity da-do-dah.... SOAB! WTF, over?

    ReplyDelete
  73. 4% inflation? Interesting.....
    http://www.nytimes.com/2014/04/07/opinion/krugman-oligarchs-and-money.html?smid=fb-share&_r=0

    ReplyDelete
    Replies
    1. We have no visibility and monetary policy flip-flops too rapidly to foster long term investment.

      Delete
    2. Absolutely. What they sew is volatility when they say they want the opposite.

      Delete
  74. JVA: Another pick triggers @ $8.10
    I started position at 7.70.

    ReplyDelete
    Replies
    1. Thanks Bro! I cheated though....I was supposed to wait for the trigger at $8.10. It languished underwater for a couple of weeks before finally breaking out.

      Delete
  75. ANR +10%, LOL.... Nice downgrade on these, so who gets to pick up JRCC at pennies on the dollar, will there be any takers of dirty fuel?

    ReplyDelete
  76. Cashed out of GLL at $85.98 avg. Taking a break for the rest of the morning. Good luck fellas.

    ReplyDelete
  77. Want to see what I live through?
    Bring up a five minute chart of GILD. I'm short from 70.50
    I need bonine.

    ReplyDelete
    Replies
    1. BTW, 5 mins for ten days. Today it has moved around by about 2.50. Thank goodness for position size!

      Delete
    2. No wonder you're such a cranky SOB all the time. :)

      Delete
    3. Yep. 70.50 to 68 yay!), up to 75 (fu$&), down to 69 (yay!)....love it when it goes my way, scary as hell when it doesn't.
      Live and die by the volatility sword.

      Delete
  78. Good for silver miners, note the GLOBAL GROWTH DEMAND theme, is it true? If yes then many metals should not be falling:
    "Zinc Reaches One-Month High as Global Grwoth Spurs Demand"

    ReplyDelete
  79. AA - Should we load up now, or wait for earnings?

    ReplyDelete
    Replies
    1. I don't know. I'm tempted to sell part in front of earnings, but only because my profits in AA are good, but that is a dumb reason. So, I'll just hold and take my chances.

      Earnings are not expected to be strong, so the important things will be if they exceed expectations and what their guidance is like. It is not a cheap stock on standard metrics, but that is the time you have to buy stocks like this and wait for fundamentals to catch up.

      Delete
    2. "that is the time you have to buy stocks like this and wait"
      Well put. I think I'll look for my entry based on the response. Trying to interpret the initial response as incorrect is always difficult.

      Delete
  80. BSBR - Alright, which one of you guys pooped on my BSBR? :(

    ReplyDelete
  81. TWTR- No relief yet. Can you imagine if it's breaks it's low?

    ReplyDelete
    Replies
    1. Some ruffled feathers there for sure, chirp, chirp!!!

      Delete
  82. GIMO - Insider Trans -94.19% Not b/c they knew something was up(or should I say down?), of course.

    ReplyDelete
  83. CIE - Thought this one might run and break to upside, but no CIEgar....

    ReplyDelete
  84. Cleared my UUP position for a small loss. Today's move looks like a knockout move, though, so probably wrong.

    I traded TZA two more times on the road and made money on it. I think I was 6 for 6 today which means I should probably never ever ever trade TZA again. Managed to add +2% to the port today which brings the total to 7% even YTD. I feel like I've had to work really hard for that gain this year...much more so than prior years. Those gains came in an instant though if you were playing the foreign trade or the coal trade the past month. Some of those moves are just plain awesome.

    ReplyDelete
    Replies
    1. Although I will say if the RUT comes near today's highs again tomorrow I will most likely be looking to pick up TZA again.

      Delete
  85. Opening a modest position in RYWYX (2x Inverse Emerging Markets) at the close.

    ReplyDelete
    Replies
    1. Good luck man. I kind of like it. I re-opened TZA, of course.

      Delete
    2. Wow. 7 for 7. I feel like the Goldman Sachs trading team. All in cash going into the close.

      So part of the reason I'm staying in lots of cash is my wife is due with baby #2 in 8 days. The stress of a birth and holding stocks is a bit too much for me at this time.

      Delete
    3. Good luck with the baby!

      I'm sure you wife wouldn't mind you stepping out of the delivery to make a few TZA trades

      Delete
    4. Haha yeah right. Well done on your moves by the way. I've watched TUR tip higher for like 10 days in a row

      Delete
  86. CC - I love the JVA chart. I almost bought it in back in January off the JO move but chickened out due to lack of liquidity in the stock.

    ReplyDelete
    Replies
    1. Actually it was probably February...

      Delete
    2. Yeah, I brought it up in the chart show and Dave shot it down because he likes a bit more liquidity, but a week or two later it was on the service list. Volume is right on the edge. He likes 200K per day. JVA is 150K.

      Delete
  87. Looks like people like the AA numbers - stock up a bit after hours. Beat on earnings, slight miss on revenue. Increasing growth forecast.

    ReplyDelete
    Replies
    1. Yeah good reaction. Nice hold on your part.

      Delete
    2. I see that, nice response so far. I saw $12.88 there.

      Delete
  88. Louise Yamada AND Dennis Gartman are bearish stocks? That's reason enough for new all time highs.

    ReplyDelete
  89. BALT- That's not healthy looking right now. Maybe the 200ema.

    ReplyDelete
    Replies
    1. I think we see 5.3 or just above prior lows

      Delete
    2. Just below the 200ema. Works for me.

      Delete
  90. KWK - This one found some interest today.

    ReplyDelete
  91. Yeah, TUR is up about 25% in the last month - just would like to have had it be a larger position!

    ReplyDelete
    Replies
    1. That idea brought me the easiest chunk I've had in a while, half position and cashed it in for the gain, thanks for that one too.

      Delete
  92. XLF - $21.87 is the line in the sand.

    ReplyDelete
  93. Replies
    1. I still follow it closely

      Delete
    2. Good to hear, I keep forgetting to check it.

      Delete
  94. Baltic Dry Index (BDI) -37 1061

    Where's the bottom, near here perhaps?

    ReplyDelete
  95. Looks like I got filled on the TZA at $15.41. Also looks like this is setting up like I was thinking...just using the 1980/81 parallel. Sideways trading for a few days after Monday's plunge. Short at the top of the range (i.e., around yesterday's highs) and cover near the lows. Edge is to bears so I'd rather short for now.

    ReplyDelete
    Replies
    1. Sorry meant 16.41. Will use stop on a move of a few points above todays highs for the RUT

      Delete
  96. What have we learned this month, that EM's are the place to be when US markets are feeling blue?

    ReplyDelete
  97. Taking RYWYX off @ the 1030 am est window.

    ReplyDelete
  98. RTH - Retail Hell still languishing. Pretty soon I expect to hear consumers went shopping last weekend and blew a wad.

    ReplyDelete