The markets remain treacherous but short-term volatility appears to have blown by, and I plan to open/add to positions in Europe, Emerging Markets (mainly Brazil), Energy (XLE/ RYEIX) and even the SPX (S&P500) on intraday signals. Note also a possible stealth rally in the metals and mining sector. It's occasionally exciting to buy panic and short exuberance, but much safer to play the 'middle' of market swings. I don't anticipate holding positions longer than a week or two. The next 'buy and hold' trade will require more time- December, perhaps.
Opening indications are positive: DJIA +175 (+1.1%), SPX +25 (+1.4%), EEM +1.1%, GDX (miners) +0.5%, XLE (Energy) +1.2%. I opened a very small position in PBR (Petrobras) yesterday, which is bidding +4.4% pre-market.
'Treacherous' is an apt adjective to pair with the noun 'markets.' Never lose sight of the fact that markets are comprised of homo sapiens motivated entirely by fear and greed! Dylan's 'Desolation Row' tells me when to buy, but Johnny Rivers' 'Secret Agent Man' defines the game:
Nick Danger, Third Eye.
ReplyDeleteCCL - Ebola patient on board in port of Belize, ship not allowed to dock.
Belize wouldn't even let the US us it's airport to pick him up.
ReplyDeleteHELI could do it.
DeleteEbola fears getting irrational it sounds like.
ReplyDeleteNIgeria has wiped out their Ebola flareup. The US with all their resources should have no problem:
Ebola outbreak: How Nigeria is beating the killer virus
http://www.bbc.com/news/world-africa-29654002
Yeah the only issue is Nigeria was much better prepared. The flare ups in Liberia / Sierra Leone / etc are the real issue.
DeleteGood news, thx for post.
DeleteFRO - Tankers on the move?
ReplyDeleteStill trying to get fills on FUNC and BOCH.
ReplyDeleteBut, did buy a position in Lundin MIning (LUN.TO, LUNMF). These guys are probably the best mid-tier miner in Canada and very smart. They just made a huge copper buy in CHile from Freeport and their stock is down on a share issuance to help finance this.
They've got good quality mines around the world, one risky one in the Congo (royalty play on another Freeport mine), but main mines in Europe.
TD projecting they make US$0.74, so forward p/e under 6. Metal prices are of course the big variable. But financially sound. I think by the end of the next cycle, people will be talking about Lundin in the way they talked about Teck last cycle.
DeleteBeen waiting to buy this for over a year, so hopefully the price is near its lows.
I remember this one. I'll take a look. Thanks.
DeleteSPLK - Never filled the gap up, might be breakaway gap for huge run?
ReplyDeleteOne trade I am considering is unloading RYWVX/ RYTNX at the 1030 window, in hopes I can reopen both at lower prices end of day. Of course, I would also risk being left behind if an impulse buy wave were to kick in for the next several days.
ReplyDelete(a) Going with Plan B. Closing RYWVX/ RYTNX at the 1030 window, into an overly-exuberant opening rally. PBR closed @ 15.07 for a +4% gain. Should I get left behind by an even more exuberant closing rally, so be it.
Delete(b) Opening positions in miners (GDX, SLW) on morning weakness.
One of the things that drives me nuts with small caps is when I have the highest bid in at $8.25 and someone goes to sell shares to me and some trading company jumps in and grabs the shares at $8.2501.
ReplyDeleteHow are you supposed to make good buys when you don't know what the real competition buys are doing - this is something I'd like the see the SEC crack down on.
They want to sell it to you for $8.2502
DeleteThe seller sold 625 shares, so the buyer scooped it for a whopping extra 6 cents. Rediculous.
DeleteYPF - Seems to be lifting as well, off that lower trend line. Argentine oil and gas.
ReplyDeleteLMT - Lockheed - Compact fusion reactor coming in a decade, can be used to power aircraft.
ReplyDeleteCLX - Are those bleach wipes in your pocket, can I borrow one to wipe down this aircraft seat?
ReplyDeleteIf I actually posted here what I thought about how we have handled this whole ebloa issue you'd kick me off the bolg and call the cops....Biden's kid gets busted for coke? I'm shocked. That was so the 80's.
ReplyDeleteOMG, I have a better medical background than that political idiot just appointed ebola czar....christ, Bidens kid does too.
DeleteI wish you would speak your mind, why deny us your thoughts and observations? The points of view of others are important to me, conversation spurs creativity IMO.
DeleteToo funny, CP.
DeleteWho was appointed 'czar,' Mark? Are they really using that title?
DeleteBiden's kid snorting coke isn't very funny when legitimate patients can't obtain the pain medication they need. What should they do, grow their own poppies or buy Heroin down some dark alley?
DeleteTXT - There ya go, ZOOM!
ReplyDeleteHopped back into LAKE at $19.04 and APT at $6.13. Added to VSR at $4.90. Not sure if this is THE bottom but the technicals I use on the hourly charts suggest its time for a bounce.
ReplyDeleteNice job on that reentry. I'm wondering about decontamination equipment, those guys are hosing everything down with disinfectants
DeleteI think two are OBCI and SWSH
DeleteBXE - We need to close that gap up, betcha it closes this afternoon.
ReplyDeleteSafari tour bookings have flat lined.
ReplyDeleteNATI too, gap up.
ReplyDeleteBAH - This one never flinched.
FLR - Good entry here? These guys also are working on the compact nuclear reactor.
JONE - What kind of boy are you, Johnny? - Men At Work
ReplyDeleteECB/EU commits to stimulus?
ReplyDeleteMTW - Larry Summers called for infrastructure investment last week, right? FLR is right there too, dunno about GV but supposedly backlog is increasing.
ReplyDeleteGood for those little regional banks too, right?
Are those reservoirs in California going to be expanded or are you guys gonna flush toilets with recycled mineral oil?
Pentagon south parking lot traffic blockaded when woman found sick and throwing up in parking lot mentioned she had recently been in Africa. Further details unclear to me.
ReplyDeleteAdded to all 3 of the ebola plays.
ReplyDeleteI closed my TVIX yesterday after I saw that IWM has bottomed out and started breaking out to the upside. The SPY chart was also screaming for a rebound. Now, during breakfast, I see that the market jump I have been expected has materialized, and I just repurchased 1/3 of the position back. Will keep scaling back into my original position gradually as the market keeps going up.
ReplyDeleteThese one day wonder rallies suck. Confirms for me this is just gambling at this point.
ReplyDeleteSWSH - Wow, look at the ROI, looks like directly infected with ebola
ReplyDeleteOil and NGas stocks seemed to have run there course which indicates to me it was short covering.
ReplyDeleteSold RRC and PBR at open, went to post yesterday but post disappeared.
Still think this market is on thin ice here. A great set-up would be if oil and gas stocks come back down near recent lows and hold, but that may be dreaming.
Crap, if it's not gas or oil it's gas AND oil.
ReplyDeleteGOOG $60B cash.
ReplyDeleteBig Brother tactics are winning against Ebola., big data? SPLK/AKAM?
ReplyDelete(a) US indexes and Emerging Markets well off the day's highs. The Russell 2000 is actually in the red, -0.4%.
ReplyDelete(b) Opening a position in XLE @ 82.25, which is +0.3% above yesterday's close but -4% off intraday highs (and -19% off its YTD high).
INTC - Up, fellas. I set up some of their equipment in South San Jose, a small skunk-works fab that was setup for manufacturing those little coded chip antennas that go in ID cards and auto keys, etc.
ReplyDeleteAnd down the stretch they come, Hoof-Hearted off by a nose with Two In The Pink slipping past inside turn #4. This horse took early bridge jumper action on news of a sloppy track, folks!
ReplyDeletet3d,
ReplyDeletehard to know for sure of course if the energy stocks were just short covering, but a lot of them sure had gotten cheap on a valuation basis unless you think sub $80 oil is here to stay for a while, so I could see the value guys stepping in. But I do find energy to be one of the hardest parts of the market to figure out now.
Interesting that the Russell is down with the S&P up 1.4%. I read this as profit taking in the small caps and money recycling into the large caps, but definitely a change in character from the last week.
ReplyDeleteHeading into the final minutes (and barring any major changes in market action), I plan to:
ReplyDelete(a) Add RYEIX (Rydex Energy) to an existing position in XLE.
(b) Reopen a position in RYWVX (Rydex 2x Emerging Markets). EEM currently 40.73 (versus an intraday high of 41).
(c) Open a position in RYRSX (Rydex 2x Russell 2000). IWM currently in the red and -1.5& off its intraday high.
(d) Open a position in RYPMX (Rydex Precious Metals). GDX currently off -2.8%.
I ended up selling all of those crappy ebola plays.
ReplyDeleteI took a blood bath on those things today which is really frustrating but I guess I have to keep in perspective how well I've done this year. At the high point last week I was at +155% which is just ridiculous given how I've played it fairly close to the vest over the past few weeks. I have gotten extremely lucky with timing but I definitely got too confident and gave back about 18% of those gains. Its amazing how this always comes on the heels of a huge run.
I did buy a little SPWR today right before the close but I am going to take the weekend and a day or two to get a mental break.
Have a good weekend guys.
That's awesome bro. Great job!
DeleteWhen you're playing things like that, it's not realistic you keep it all. Would be nice, but I think it's really just part of the cost of trading stuff like that.
DeleteStill, great work on playing the downside and jumping on the Ebola trendy stocks. Sounds like a lot of people and funds are having tough years, so when you can do well in those years, you know you have a good strategy.
Crazy year man. I really feel like I was a week away on my biggest winners from losing money this year. I got on a good run the past two weeks despite keeping 40% cash. I am actually wondering if that's a smart strategy going forward. It helps you make more rational decisions regarding buying and selling
DeleteGE - Still in the game fellas, too many people are counting on the gap to close and I'm not convinced they will be given the opportunity this time.
ReplyDeleteWhat happened to the ECB stimulus, I read they made some commitment?
We just bought a ford flex. Exchanged the ford edge for it. We wanted something with 3 rows and my wife was pushing for a expedition or a mini van which I objected to both. The flex is a little funny looking but it's really roomy and we added a moon roof to it. We went with a lease only because I like a fixed monthly cost with no surprises and I like changing up cars every few years.
ReplyDeleteSeems like a good vehicle and reasonable for 3 rows. How much room in the back?
DeleteThere's a few feet of space in the back with the third row up. It's fully collapsible though and is nice and roomy when it's down. We really like fords after having the edge
DeleteYour lucky you don't live here. I'd be obligated to shot you. Sorry, just the way it is.
DeleteYou have something against it?
DeleteI bet it runs like a top, is it the Turbo model? Interested in the fuel mileage you get.
DeleteChina announced stimulus too, EWZ shot up.
ReplyDeletehttp://www.businessinsider.com/wsj-china-central-bank-stimulus-2014-10
ReplyDeletehttp://www.nasdaq.com/article/update-european-shares-surge-as-ecbs-coeure-signals-start-of-stimulus-program-cm403252
Something else to watch:
Deletehttp://www.reuters.com/article/2014/10/17/us-brazil-election-poll-idUSKCN0I62CT20141017
Breaking....all Ford Flex vehicles to be sized immediately by the CDC to be used as one time Ebola transport vehicles.
ReplyDeleteThat's the problem with newly-appointed czars. They all feel the need to do something immediately, and it's usually something bizarre.
DeleteThat's clever AND funny!
DeleteAGCO - It appears to me Sirinsiki Mallika must know something.
ReplyDeleteCALM - Have you guys seen this chart? We missed a double. Insiders own 24% looks like, so there's some good motivation.
ReplyDeleteYELP - Why wouldn't this also happen to YELP in the next 12 months?
GOOG - I dunno, my intuition tells me this one is going back up. That's not much to go by, is it?
GOOG - Pretty decent example of a correlation between share price and volume of insider selling?
DeleteI heard something on the radio that GOOGL is worried about losing market share to AMZN.
DeleteMark - One thing I've been thinking about regarding GOOGL is the way technology is changing it may marginalize them a bit. Like TWTR for example...they added a search function which is really awesome...its much more instantaneous if you're searching for stuff related to the news. I use GOOGL news for news feeds but its not as instantaneous as Twitter. This feature really changed my opinion of TWTR a lot and I think it does have an impact at the margins on GOOGL. I also think AAPL could push a lot of their own search features to their users if they want to and cut out GOOGL. I'm beginning to wonder just how much of a moat they have. I think it's huge but I think its shrinking very slightly at the margins and when you're valued at like $500 Billion that matters. I could be wrong but its something I've been wondering about...
Delete
ReplyDeleteBB said
“t3d,
hard to know for sure of course if the energy stocks were just short covering, but a lot of them sure had gotten cheap on a valuation basis unless you think sub $80 oil is here to stay for a while, so I could see the value guys stepping in. But I do find energy to be one of the hardest parts of the market to figure out now.”
Yes, I was looking at oil stocks the night before and was going to buy CVX, COP, SLB and some MLP’s looking for yield and long term hold. The next morning they mostly ripped higher and I did not want to chase, if I get lucky they may re-test lows and my opportunity will happen.
Here is some of my thinking:
a) I doubt anyone here at the beginning of the year would think we would have $80 oil
b) 100 to 80 is -20% the stocks are down about -17-22% at there lows. I find it hard to think that oil will go to $70 but realize that one must never underestimate what the market can do in either direction.
c) If oil would go to $70 that’s another -12%, oil stocks would probably lose another 12 to 17%, imo.
d) MOG thinks the range of oil going forward is 80-100 range tending towards more time at 100. WTI briefing fell below 80 this week but found support and defending at 80. So that’s my cue here going forward.
e) There seems to be politics at play here in Saudi Arabia and I have no insights as to what’s going on there.
So, I generally feel comfortable holding oil long term for yield here if I can get lower prices ideally, but may have to pay up. Obviously, I like large cap very stable companies here and will leave sub 10 oil plays to the younger guns.
Short story, remember Exxon Valdez, my friend was sitting on a trading desk the day after that happened in Honolulu visiting a friend who had to go to the restroom. The phone rang and my friend answered it. The voice at the other end say’s this is Henry Weinberg (the guy was a Jewish billionaire who made his money in RE and was from Baltimore but lived in Honolulu), I want to buy Exxon bonds, Ken says how many? Weinberg says “all of them!”
If anyone has any other thoughts on oil here or see holes in my thought process, please chime up.
http://www.nytimes.com/2014/10/18/business/energy-environment/us-oil-boom-shows-no-signs-of-slowing-down.html?src=me&_r=0
DeleteAgree, I often wonder how the peasants are getting along as well! :)
DeleteWhat do you think of this? http://oilandgas-investments.com/2014/investing/why-its-different-this-time/
DeleteInteresting perspective, you just never really know. If you look at monthly charts of oil stocks from a price point of view, there could be lots of downside to go. It just depends somewhat on what you are trying to achieve, my issue is I do not like capital loss which makes it hard for me to hold stocks for dividend income.
DeleteTake a look at the monthly chat of WTI since 1990 for perspective.
If I could trade like TOF, I would not seek income at all, 155% wow!
Per UBS on 17th
DeleteWe are upgrading the US Land Drillers to Buy from Neutral
We are upgrading the US land drillers given our view that sell-off in the stocks has been overdone, even
assuming a more cautious N.Am environment. We believe upside risk of 40%-80% exists if oil prices
return to $90/bbl WTI. However, downside risk of 25% exists if oil prices slide to $75/bbl for a sustained
period of time. To be clear, buying the land drillers is partially a play on oil prices. However, underlying
industry fundamentals due to US unconventionals are also positive and the demand for pad-capable rigs
will grow.
Positive underlying fundamentals – strong demand for add’l pad-capable rigs
We believe over the next 3-5 years that the industry will need 250-400 new higher-spec pad-capable
drilling rigs. Today 25% of the US rig fleet is able to handle multi-pad and “multi-row” drilling (walking
type rigs), vs 36% of the rigs which are higher spec rigs but only capable of single row pad drilling (skid
mounted rigs). The remaining 42% (~800) of today’s rigs are older legacy rigs (mechanical / SCR) of
which we believe 30%-50% of these rigs will be replaced by these newer, more capable rigs. Ultimately
as newbuild land rigs are delivered we expect dayrates to flatten out (likely early-15) and for the
newbuilds to replace the legacy rigs (likely mid-2015). However, we still expect modest growth in
average dayrates / rig margins as the newer rigs earn higher relative pricing. Rig margins for the newer
ultra-high spec rigs are roughly $15-$18,000/day vs $10,000 for high spec rigs and $8,000 for legacy
rigs.
35% average drop in stock prices from recent highs vs oil declines of 19%
The US land drillers are the most exposed to changes in oil prices. However, even if we assume a 25%
drop from our current ‘15 EBITDA ests (which we are not expecting) the stocks are still trading at a slight
discount to the recent multiples (seen July 2014) and would still be trading at 8% discount to their 10-
year avg. In our view, the risk/reward ratio is compelling however the largest risk is oil prices of $75/bbl.
At oil prices of $80/bbl we believe the rig count is flat (but upgraded) and at $85/bbl and higher we
expect modest growth (2%-5%).
above cited, HP, NBR, PTEN
Deleteper UBS, SLB
DeleteQ3-14 EPS of $1.49 vs our estimate of $1.46 and consensus of $1.47
Operationally results were $0.01 ahead of our ests with Latin America ($0.03), Europe/CIS/Africa ($0.02)
and N.Am ($0.01) ahead of our ests with Mid.East/Asia (-$0.02) and Eliminations & Other (-$0.02) below
our ests. Taxes helped by $0.01.
Noteworthy takeaways… expect modestly positive stock implications
(1) SLB maintains overall positive outlook despite crude price volatility and sees "continued solid demand
for SLB's products, services, and expertise". (2) All regions posted revenue growth in Q3 driven by new
technology penetration and strong operational execution. (3) New technology across all segments saw
further market penetration and helped drive pricing. (4) US land margins continued to expand on
improving efficiency, better utilization, and recovery of logistical costs. (5) Latin America rebounded in
Q3 with revs up 10% q-o-q driven by strong Integrated Project Management (IPM) work and deepwater
drilling activity in Mexico. (6) Repurchased $1.5 billion in shares in Q3 (~1% of shares outstanding) at
avg price of $108. (7) WesternGeco backlog declined to $840 mil from $913 mil in Q2-14.
Operating income 1% above our ests, revenues essentially in-line
North American revenues were up 9% q-o-q (in-line with our ests) driven by strong US land results and
the Canadian rebound (NAM offshore up 12% q-o-q, land up 9%). Despite headwinds in Russia and
Northern Iraq, SLB's International results were up 3% q-o-q (again in-line with our ests). SLB has now
posted margins above 20% in all its international regions for the sixth consecutive quarter (SLB at 24.6%
vs peers at 13%-15%). MARGINS BY REGION: N.Am 19.4% vs our 19% ests, Middle East/Asia 27.6% vs
our 28%, Lat.Am 21.9% vs our 20.8%, Europe/CIS/Africa 23.4% vs our 22%. Total int’l margins were
24.6%, 62 bps above our 23.9% ests.
Valuation: $140 PT based on a 21x 2015E P/E
Our long-term positive outlook remains intact and SLB’s technology and execution should continue to
drive results. However, headwinds from Russia (6%-7% of SLB's revenues) and deepwater will likely
remain an on-going issues.
"Never lose sight of the fact that markets are comprised of homo sapiens"
ReplyDeleteTrue, no need to be a homophobic.
Notice the ema's have rolled over. I can't imagine not visiting the 942 H&S target. But energy prices are dropping like a rock, that should temper things somewhat.
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$RUT&p=W&b=5&g=0&id=p83368137333
My son Jett wants to be Queen Elsa for Halloween should I just roll with it?
ReplyDeleteI should clarify he will only be 3 in November
DeleteYes, why not? And, take pictures. I remember burning some pictures of me and my sister in dresses, LOl....
DeleteYeah I thought about it some more. The little guy plays with cars and garbage trucks all day. So he likes Queen Elsa too. Dude seems pretty comfortable in his own skin. Plus, she's a superhero that can make ice with her hands.
DeleteMan I was doing some dumpster diving tonight researching for some real dogs. The coal names came to mind. Didn't realize some of those made like 70% runs this week, low to high (ACI). the fundamentals are horrible, but ANR still kind of intrigues me. They have $1.1 Billion in cash, $3.8 Billion in debt (Net -$2.7 Billion). Negative FCF of 463 Million. Price to Book of 0.12. Enough cash for 2 years or so. They own like 6 million shares of RICE.
ReplyDeleteCan they right the ship? Is it a John Templeton type company (ie one of the 104 lucky companies he bought stock in back in 1939 that were priced $1 or less)?
T3 - I still wonder if oil prices won't be in a prolonged downturn. Could this be what fuels the bull market higher after it goes through a mini downturn / consolidation? Think about how long of a bull market this one in energy / oil has been then take a look at a 50 year chart of oil prices. It's a cyclical industry with competing sources of energy becoming a real threat like solar electric wind etc. just a thought but I think it's possible energy names without some sort of alternative energy exposure could be in for prolonged trouble
ReplyDeleteOil usage is still quite difficult to replace. The bulk of it is used in transportation and there aren't really good alternatives to oil for this now. Electric market share for cars is very small and there are no electric trains, boats or planes. Reality is oil is a very efficient source and storage of energy. The easy replacements (home heating) have been made, so the current ways usage is being slowed is through better fuel efficiency in cars and less driving. But it is an uphill battle with so many cars being added in the rest of the world.
Deletehttp://www.eia.gov/tools/faqs/faq.cfm?id=41&t=6
I think the other reality is low oil prices will lead to increased economic activity which leads back to more oil usage. So, while oil prices could be low for a year or three because of political issues (like Saudi), it seems to me that it is the type of commodity that should be self-correcting pricewise moreso than the miners.
Hoping we see a relief rally at the open. Would like to re enter TZA at around 16.7, Fridays lows
ReplyDeleteA lot of the bottoms the last couple of years have been spike down ones like the recent market activity, so it wouldn't suprise me if that was it.
DeleteBut certainly not my field of expertize.
JONE - Stopped out @ 12.29, a 3% gain
ReplyDeleteIBM is stinking up the $dow
ReplyDeleteGIB down in sympathy. Not a bad entry point. Still good value unless you think the IT services economy is slowing based on IBM's numbers.
DeleteNG - Got sum new lows here. Due to warm weather forecast? I feel winter here, have the heat pump going for a week now.
ReplyDeleteThat's interesting. We just put out heat on a couple of days ago (other than the occasional day here or there) and have had the windows open at least upstairs for a lot of October.
DeleteRight, it's really not been too bad this October but not any warmer than usual, a warm spell isn't abnormal here but 65*F in the house is too cold. Last night we were close to having frost but we were in the lake Saturday, water temp was 70*F and bearable but we can feel winter coming, it's not skipping us this year.
Delete10*C outdoors just a few minutes ago.
DeleteI picked up a position in TNA pre market at $59.06, thinking it would rally to $62 before falling again. I'm hoping to play a retest of the opening high from Friday then going long TZA. That's really all I'm looking to trade right now just because I think we see lower prices in the bigger picture. The only sector I'm still eying for longer term positions is solar (got some SPWR on Friday) but even that is probably susceptible if the market does head lower.
ReplyDeleteFULT - Beat up too, about to slip off the edge?
ReplyDeleteJeez did you guys see the move in PEIX / REX / GPRE? Wild swing.
ReplyDeleteI posted a link to Crossing Wall Street a week or two ago about companies moving their earnings call up or down and how ones that move them up generally report better numbers. Well, I just realized that SPWR moved theirs up from 1:30pm on 10/29 to 5:30am on 10/29. Wonder if this falls within those parameters...
ReplyDeleteEurobank stress test results soon? I thought results were going to be released last week...
ReplyDeleteI think the key is that the ECB is leaning toward (and most likely will do) full blown QE. I doubt it has the same punch that the US QE did but my guess is Europe outperforms the US for the next year...maybe down less?
DeleteProblem is as I understand it is Germany isn't going along with the plan as has resisted all along. Germany says it's illegal. So the expectation is ECB makes the stress tests look particularly ugly in an attempt at convincing Germany to give an ounce.
DeleteWhat I'm getting at is when the announcement arrives there could be an opportunity if you have your ducks in a row.
So, I don't understand why everyone thinks it's a done deal, perhaps I've missed something, wouldn't be the first time and I'd appreciate being set straight.
BXE - This one gets sold whether it needs to or not. Up is down and down is down. :( Shoulda sold half of this and kept JONE
ReplyDeleteDoubled down on small position in SPWR at $29.47
ReplyDeleteNot looking for much more than a day trade on stuff though at this point. Just hoping they rally the russell higher so i can sell my longs and buy TZA around 16.7
DeleteENZY - $6.64 is the line in the sand.
ReplyDeleteSeems like some betting against O&G moving lower.
ReplyDeleteOIBR - Glad this is a token position. But, look how it gets treated at the close past couple sessions... Wonder if the last minute buying sprees continue?
ReplyDeleteBack in April when we were talking about alcohol companies I put together a spreadsheet of companies in the sector. Its been exactly 6 months since I looked at them and the returns weren't that great.:
ReplyDeletecabgy -13%
SAM -6%
BUD -2%
FMX -6%
TAP 20%
CCU -7%
VCO -5%
HEINY 2%
TSGTY -4%
SMGBY -6%
The only positive ones were TAP and HEINY. TAP, HEINY, BUD, and CABGY were the only ones trading below the group averages for p/fcf, p/e, and p/b. The average return for the entire group was -2.6%. The average for those 4 "cheap" stocks was 1.99%. See, fundamentals do matter!
Yep, sure does. TAP tore HEINY up, too!
DeleteSold SPWR at $29.93.
ReplyDeleteAnd 29.97. I'll take a 1.8% one day gain in this market.
DeletePicked up a little SLCA at 48.15. It's just so beaten down.
ReplyDeleteI'm thinking the Russell 2000 is holding under this 1090 level for the past few days and there's going to be a burst higher here soon that may or may no last due at least to short covering. I'll be selling TNA / SLCA into the burst if it happens.
DeleteI'm looking at the DAX, it hasn't followed the $RUT.
Deletehttp://peterlbrandt.com/wp-content/uploads/2014/10/10.6_DAX_D.jpg
By that I mean it hasn't broken up through the resistance like $RUT has.
Deletehttp://www.peterlbrandt.com/wp-content/uploads/2014/10/10.6_TF_W.jpg
Maybe it's blue skies from here until the eurobank stress tests are announced at which time it might be high enough to short for a few days?
Mort Zuckerman seems to have reversed his position on China, said China is going to be the shining star of BRIC So today EWZ is getting clobbered but I have to think there should be an entry somewhere, just not here.
ReplyDeleteKB - Heard over the weekend there was exchange of gunfire with North Korea along one of the border areas.
One would expect the mess in the middle east should be O&G positive, is ISIS on the run here?
I actually just bought a little EDC. It's putting in some very nice positive divergences like YELP did back in May. I'll go heavy in it I think if there is one more dip.
DeleteENZY - Now $7.12.... +7.2%
ReplyDeleteGood interview with Leon Cooperman right now on CNBC. He thinks the market is fairly valued. He mentioned earnings are 120 but I still don't quite understand where people get that number from. I believe they're looking at pre tax earnings.
ReplyDeleteEnded up selling the longs and went into TZA at $17.19.
ReplyDeletewill sell TZA if it falls below $16.5. Target is 21
Deletemarket could rip higher from here and if it does a move below 16.50 means a loss of 4%. If it continues to fall then a move to $21 is about 22% up. 5 to 1 reward risk ratio in my opinion is a good one. doesn’t mean it will work but its fairly low risk
DeleteTVIX - Getting smashed of course. So if $RUT does rally then even better than shorting might be TVIX, eh?
ReplyDeleteBuying those volatility things for anything more than a day trade requires insanity.
DeleteVery interesting to me that XLU is about to make a new all time high.
ReplyDeleteI think it is because rates have been falling. Utilities get hit hard when rates rise, so this is the converse.
DeleteThe problem with a lot of utilities is they are very expensive on most metrics. People keep buying them for their "yield plus a little growth" structure, but I think they are very vulnerable as rates rise.
BB - I've noticed in the past that right around major intermediate term tops, utilities tend to make new all time highs AFTER the market has topped and rallied back to a lower high. This was evident in pretty much every single intermediate top since the 90's.
DeleteSold TZA at $17.07. Oh well.
ReplyDeleteI put back on the EDC trade, though its small. Still just keeping a lot of cash until I can be more comfortable with the direction of things and see more good setups.
Ended up adding a good deal more to EDC. Avg is $25.27. Figure this could be a hell of a trade into the year end. If there's any sector of the market that could see a 10 to 15% rally into the year end its emerging markets.
DeleteTOF, this guy is good at tracking S&P 500 earnings. He updates it weekly:
ReplyDelete"Per Thomson Reuter’s “This Week in Earnings”, the forward 4-quarter estimate for the SP 500 slipped to $129.34 this week, from last week’s $130.02.
The p.e ratio on the forward estimate 14.5(x), as of Friday’s market close."
http://fundamentalis.com/
Do you know if he's looking at operating or net earnings? I'll have to look into this more
DeleteClosing all positions end of day. The SPX is changing hands @ 1902, which is two points shy of my original bounce target of 1904. 50/50 odds the rally stalls here.
ReplyDelete(a) RYEIX (Rydex Energy). Based on current pricing of XLE, the position should close +0.8%.
(b) RYPMX (Rydex Precious Metals). Based on current pricing of GDX, the position should close +2.5%.
(c) RYRSX (Rydex 2x Russell 2000). Based on current pricing of IWM, the position should close +1.8%.
(d) RYWVX (Rydex 2x Emerging Markets). Based on current pricing for EEM, the position should close +0.5%.
Persistent weakness in Brazil (Ibovespa -2.6%) has me considering positions in EWZ (-4%) and PBR (-6.7%).
2nd - the runoff election is sunday for Brazil. Rousseff is the favorite and interpretations by the market are that she is bad for the market. My suspicion is any market weakness will dissipate. I'm keeping cash in case the market reacts adversely to the election results which would hit EEM. When there was a runoff (and Rousseff wasn't the clear winner) on 10/5/14, EEM jumped the following day some 1.5-2% (Brazil was up like 6%).
DeleteThat's right. If Neves wins, Brazil markets could see a post-election surge similar to India's.
DeleteThe question is does the market sell off if rousseff wins?
DeletePersonally, I think that's close to being priced in, but who knows?
Deletehttp://www.businessweek.com/articles/2014-10-15/chinese-home-buying-binge-transforms-california-suburb-arcadia#r=read
ReplyDeleteHXK - And this one's not being bid up in AH.....
ReplyDeleteTOF, re the utilities, that is interesting and valuable info if it continues. My only caution would be that I've never seen utilities so expensively valued, and with rates so low, it would not surprise me at all to see the general market rise with interest rates (and an improving economy), but interest rate sectors like utilities and REIT's fall.
ReplyDeleteIF it is going to happen any time, this seems like it would be it.
Shit with rates at sub 1% in Europe why would our rates go up?
DeleteMy quarterly portfolio review is available at Schwab. I'm avoiding it like TOF's pimp ride.
ReplyDeleteDon't bag it. It was that or a minivan!
DeleteI'll worry when I see a chandelier mounted on the hood. :)
DeleteWow this is an eye opener:
ReplyDeletehttp://stocktwits.com/message/28217419
Great little chart on each market's expected return:
ReplyDeletehttp://www.researchaffiliates.com/AssetAllocation/Pages/Core-Overview.aspx
Click on the equity tab. The ones to the top right have the highest expected returns
Ewz down 5% pm. Rousseff gaining momentum in polls. Double bottom or worse?
ReplyDeleteTook a stab here 41.1
Deletenew post
ReplyDelete