Today's action in the miners certainly had the feel of stops being run, with prices dropping below recent lows only to rebound strongly into the close.
Brazil? Here's my take. I originally intended to buy tomorrow, taking shares away from nervous investors heading into Sunday's elections. However, there must be a few hundred thousand other traders with the same outlook. In addition, the midday plunge in EWZ to 39.38 was eerily similar to the stop running pattern in miners. I'll wager that the Ibovespa gaps up on Friday, frustrating both today's sellers and tomorrow's buyers.
You know what else - the people in Brazil will have a much better take on how the news falls as they are hearing and reading about it all the time and are trading accordingly. In North America, we are basing opinions mainly off the US press, so who knows how accurate it is. There is also a good chance we get a sell the news type reaction as the results could already in the stocks.
ReplyDeleteToo complicated for me!
Sell the news sounds like a bargain to me. I have no idea what's going down there but it's probably all about Wall Street wanting to own Brazil and her carbon credits or something?
DeleteCP, what is the story on OIBR? Stock is down, but there's some exchange going on and I recall I read they were in some financial trouble. Are you just trading the chart or what's the story that makes it worth buying?
ReplyDeleteBB, I'm trading Brazil via OIBR. LOL, It's not working. I really don't know what's wrong with the stock except the CEO resigned and looks like they're losing money so maybe it has a long way (down) to go? It's a very small position I started at $0.52, added a few shares at $45, this is one Jesse had highlighted a couple weeks ago.
DeleteCompletely in the dark on what to expect....
BB, are you trying to tell me you think I should let this POS go? Based on price action I'm considering it.
DeleteSo there go YELP and AMZN, less than 12 hours apart.....
ReplyDeleteMilestone Aviation Group, bought out today... So what about HELI?
AMZN - Got whacked on "flopping phone"? Doesn't sound like a consumer spending issue more like a bad idea to pursue "me too with the Jones'" business plans?
I believe their guidance was pretty weak in terms of sales growth. That phone doesn't really make a dent in their overall sales
DeleteHDSN - Going to $20 ? I don't like the insider selling but it's not like they dumped 80%, just 9.5% or so...
ReplyDeleteEWZ - Screw that one, how about PGAL (Portugal)?
ReplyDeleteI actually bought some EWZ after hours today. I was thinking the same thing as 2nd after I sold it. Today seemed like a massive shakedown.
DeleteI think that's a good idea, guess we'll see.
DeleteKinda wondering about Portugal too.....
Pre-market indications are encouraging.
ReplyDelete(a) EWZ (Brazil) bidding +1.6%. PBR (Petrobras) +2.8%. Both still high-risk positions.
(b) Miners holding up. Flat.
(c) TLT (long bond) +0.4%.
(d) EEM slightly higher.
All in all, markets appeared to have recovered from overnight declines on news of an Ebola case in NYC.
CP, I really don't know much about OIBR. I took a quick look after you mentioned it, but it seemed quite complex and risky, but I have no idea if it is a good stock.
ReplyDeleteMy Broker has $1.20 on it or something like that but not sure if it's wishful thinking, seems like it. At least it's small, but I need something that's not crashing as all of these in my port seem to be.
Delete"Oi (OIBR)
DeleteWe arrive at our 12-month price objective of $1.20/ADR using a FCFE valuation
method, with a cost of equity of 15% and a terminal FCF growth rate of 3%.
Currently trading at 5.0x EV/EBITDA 2014, OIBR would trade at 5.7x EV/EBITDA
2014 at our price objective. We prefer to look at FCF yield for telcos, given the
capital intensity of the industry. However, in our view it does not make the better
sense in Oi's case right now given its still negative free cash flow. We have the
same view with respect to looking at P/E ratio. As a result, we recommend
investors look at Oi on an EV/EBITDA or DCF basis.
Downside risks to our PO are: (1) no/low single-digit growth rates for the Brazilian
telco sector, (2) the Portuguese economy, even though improving, remains
sluggish, (3) capital intensity is high for the industry globally and with risk of
increasing further, and (4) Oi continues to have high debt leverage (4x net
debt/EBITDA), even after the conclusion of the R$8.25bn cash injection."
JONE - Wow, wonder if it's worth a shot?
ReplyDeleteEWZ - Nice!
This is really tough b/c I'm so beat up with BXE
I never look a gift horse in the mouth.
ReplyDelete(a) EWZ off @ 41.54 (+4.3% from yesterday's close, and +2.5% from my basis).
(b) PBR off @ 13 (+7% from yesterday's close, and +4.3% from my basis).
(c) Will likely take RYWVX off at the 1030 window despite a modest +0.4% gain in EEM. Why? RYWVX is heavily weighted in Brazilian stocks, and priced correspondingly.
Hoping to reestablish positions in selected Brazilian equities near the close.
Nice work, man! :)
Delete2nd - Thanks for the wakeup call on EWZ. I panic sold yesterday and after the close realized my mistake and put the majority of the trade back on. Take a peek at the chart of EWZ and compare it to the chart of YELP back in late April / early May. If the correlation holds true we should see a spike early/mid next week then a drop down to the lows again where a bottom forms, not much lower than yesterday. I think $48 is a big reference point. The subsequent rally should take it up to there. If you can get back in under $40 that's a 20% rally.
DeleteEEM looks similar, although the upside appears to be less.
I think as far as I'm concerned I'm only going to look to buy weakness. I will not sell just because I don't want to lose my position should it not pull back.
DeleteAs Mark would say, I'm happy to provide an instant analysis of any situation, anytime. Haha.
Delete----, EWZ's up to 41.75. I gave it away.
Delete$WTIC - Down like 3% on the UCO, guess the inventory report must show a build.
ReplyDeleteIt seems to me the market is ready for a minor pullback to test recent buyers. I'm still targeting 1,080 for RUT
ReplyDeleteI took EWZ off at $41.97 against my own advice and am hoping for a test down near the lows of the day...
Let me know when it's time to short, I can taste it. If Germany does agree to stimulate I'll be surprised and that could burn shorts. Could be the decision is already made and that's behind the recent strength? I don't see how it could happen without a big fight but maybe the arguing has already passed, I don't live in Europe obviously so lack detail.
Deleteema's on this chart have rolled over and that's bearish. But, there's an iH&S formed which might play out...
http://stockcharts.com/h-sc/ui?s=EWG&p=W&b=5&g=0&id=p00134280199
To me, this chart looks like it's about to puke blood:
Deletehttp://stockcharts.com/h-sc/ui?s=$SPX&p=W&b=5&g=0&id=p46443565517
YELP - Wake me if this one goes back to $20's, I just can't do it here......
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=YELP&p=W&b=5&g=0&id=p21529044840
HXL - See in this chart, the EMA's have rolled over? I see a lot of these and don't like them.
http://stockcharts.com/h-sc/ui?s=HXL&p=W&b=5&g=0&id=p36722717429
Where's the manufacturing Renaissance, looks like old news?
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=ROLL&p=W&b=5&g=0&id=p64003173120
These ema's have rolled over as well, this is bearish:
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=FLR&p=W&b=5&g=0&id=p62149303763
I for one would like to see a huge rally that takes oil with it so I can at least break even on BXE, but that just doesn't match with what I see evolving.
RYWVX (Rydex 2x Emerging Markets) closed the 1030 window up @ 73.71 (+3.06%) despite just a tepid rise in EEM at the time. Awesome. (EWZ actually printed an intraday high of 42.30!)
ReplyDeleteInverted H&S on SPX, but will the purple line become our readjusted destiny?
ReplyDeletehttp://1.bp.blogspot.com/-KD6teeQbYrM/VEky1VospcI/AAAAAAAAPkA/TZvnCEISGok/s1600/spx%2B10-23.JPG
NM - WTF? What happened to this one that was headed to beyond the treetops? I guess global warming should be blamed.
ReplyDeleteI'm contemplating buying back into EDC. I honestly can't time this at all. My guess is we see a mini pullback next week into the Fed meeting but I really don't have a great feeling for it. So the issue is if we don't then I want to be long emerging markets but if we do I want to buy into weakness.
ReplyDeleteCCJ - When does Japan relight their fission reactors? Surely they've had enough time to review their previously non-existent safety process.....
ReplyDeleteOpening PTX @ 9.50 (a Shark alert).
ReplyDeleteOff 9.69.
DeleteRound 2 in Brazil coming up?
ReplyDeleteReopened PBR @ 12.52.
ReplyDeleteOff 12.82.
DeleteI'm here for you guys!
ReplyDeleteCould you (a) tank the US and Brazilian indexes and (b) spike miners/ bonds into the close, please? Thanks in advance.
DeleteNobody here but us chickens! :)
DeleteYou hauling water to Mendota this weekend?
DeleteIWM has regained 1/2 of the drop from its recent early-Sept peak and has simultaneously reached its early-August bottom. Its 1-year chart suggests that now is a reasonable place to short it. I just purchased a September 2015 $121 put on it for $16, giving me a breakeven price of $105 by next September. I think it is a reasonable hedge for me against the broad market decline, which will take ORCL shares (which will vest for me next summer) down together with it.
ReplyDeleteOpening RYTPX (Rydex 2x Inverse SPX) at the close. The SPX has rallied 140 points (7.8%) off its intraday low October 15, and is now just -3% off its YTD high? In my experience, that's unsustainable. A retest of 1819 may not be necessary, but a 'V' recovery back to 2019 is highly unlikely.
ReplyDeleteMoved some of my cash back in heading into the close. Long HCLP, TUP, TWTR, EDC, EWZ, PNRA. I think all of them are cheap, except TWTR which I've completely done a 180 on because of the search function they have on their site which I think is a game changer longer term.
ReplyDeleteOkay, so apparently the eurobank news is out.
ReplyDeleteMy hotel is 2 blocks from the spot where that Sacramento deputy was killed today. And we changed hotels from where we always had stayed before because it was sketchy. Maybe no more.
ReplyDeleteIn that case you should probably lay low for a while so they don't suspect anything.
DeleteProximity to violent crime can be a mind-blower. I recall one cross-country trip in the late Fifties where my Mom and Dad mentioned we had left a camping ground just several hours before a killing. I can't recall exactly where, but it might have been the Badlands which would mean Nebraska/Charles Starkweather.
DeleteTSO bought 8M shares of TLLP ? Hmm.....
ReplyDelete