Tuesday, October 7, 2014

10/7/14 Stops

My opinions about market direction can and will change on a dime. Regardless, risk management is paramount. Having stops in place (or at least in mind) is not an option. 

What's a reasonable stop? 10%, in my opinion. I wouldn't want to see my portfolio balance fall more than -10% from its YTD high. Losses beyond that point take an emotional toll. 

Most foreign markets have already corrected over -10%. China, Hong Kong, South Korea, Australia, the UK, and Spain are in correction territory (>-10%). Germany, France, Italy and most of Latin America are nearing a bear market (between -15% and -19%). Brazil has already entered a bear market (>-20%). 

If the total stock market ex-US has corrected, why would the DJIA/SPX/NDQ be spared?

169 comments:

  1. I have a distinct feeling I will regret selling my EDC tomorrow.

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  2. Canada still hanging in with a 9.3% pullback, so no official correction so far.

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  3. It seems like TOF and I are on the same page, looking to buy European stocks.

    Given how these markets have corrected, it is probably time to start looking for entry points.

    Plus, it just seems like expectations are very low and any sort of good news could cause a fast rise.

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  4. ANother 59,700 shares of insider buying at BXE yesterday.Not sure who as the TSX has a 2-tier system where the purchase is flagged and the actual purchaser files the forms afterwards, but still a good sign.

    Actually, a lot of insider buying on energy stocks on the TSX yesterday and almost no selling.

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  5. Sold cmrx pre market at 35.03

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  6. Buying some ICPT, a biotech with a novel treatment for non-alcoholic fatty liver disease (NASH), a disease with very few treatment options. The stock has been hammered recently as they have delayed publishing updated results. In briefing.com today this came out: "NASH CRN has decided to focus on finalizing the manuscript intended for near term publication in lieu of presentation at AASLD. We are reaffirming the previously reported top-line results based on a revised draft manuscript that our partners at NIDDK have provided us. We believe that peer reviewed publication of the FLINT data will mark another important milestone supportive of OCA's potential as a novel therapy for patients with NASH and associated liver fibrosis".

    It's a speculative biotech, but the potential looks fantastic. I am long (small) and looking to buy more today.

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  7. BB, regarding your previous comments about Bankia, you are right that there are safer options. For me, it's purely speculative. The Spanish banking sector has undergone massive change in recent years and despite all of its problems, it is still one of the biggest players.

    Regarding Tesco, I think there is value there. They obviously have problems right now, both operationally and competitively, but also primarily due to the accounting issues. I see it as a high-risk, high reward type situation. I own shares, but nothing excessive.

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  8. I loaded up on SPXS today at $25.9ish. Gut instinct says this is only 1/3 of the way thru

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    1. Unfortunately my gut is wrong about 90% of the time on short term trades...I'll probably be out at EOD knowing my inability to hold these things long.

      Seriously, though, I keep looking at a chart like the 1938 market, which had a rally back to old highs then a collapse. I don't expect a collapse but a bidless tape for 2 months is possible. Down 15%? I wouldn't be surprised. I just can't find anything to hold at this point and keep seeing traders' posts looking to go long stuff

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    2. A month ago it was universally accepted that you're a lunatic for shorting anything. In fact, I read several notes from institutional investors that were previously focused on shorts that specifically said you can't short anything any longer in this market. I wish I kept them. I'll try to dig them up.

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  9. Fading my own sentiment, and going long Emerging Markets at the 1030 window.

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    1. Interesting man. I might take your cue. They can't bust the market down below 1924 so it could rally.

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    2. Nevermind. That low was taken out.

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  10. Look at this long term chart of oil fellas:
    http://www.tradersnarrative.com/wp-content/uploads/2009/06/inflation%20adjusted%20price%20of%20crude%20oil%20long%20term%20chart.png

    This is inflation adjusted so you can see just how wild the swings were in the past. Who's to say we don't get a 50% drop in the price from highs? Which companies will survive in that environment, given they most likely adjusted the cost of their operations to higher prices? That's why I think it could be a really bad idea to jump into the energy plays right now. Clearly something has changed. Wait for the stabilization first is what I'm thinking. We've seen just how nasty the downturns in industries like coal etc can get during cyclical downturns.

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    1. Interesting. It could make sense that we've overinvested in energy production as a response to the $100+ oil and now that demand is weak, the price falls. It is a similar story to the 1980's where companies expanded due the oil crisis, but demand fell because gas was too expensive. A lot of these projects, like the oil sands, need $70 oil to justify themselves, but now that the plants are built, the ongoing costs to keep them running will be much less.

      Hard to say, but I still think energy should do well over the next few years as the economy improves and demand, especially from China, etc. increases with car usage. But lots of factors at play these days that make it complex.

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  11. Look at the trading in these stocks of late:
    FNMA
    EMES
    ARWR
    GTAT

    These were major trading stocks. Lots of money has been lost by bigger traders. Don't underestimate the impact this has on those funds' other holdings (ie selling to satisfy margin calls)

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  12. There's your short covering rally.

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  13. https://gma.yahoo.com/man-tries-trade-decrepit-detroit-house-iphone-214400598--abc-news-topstories.html

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  14. http://www.bloomberg.com/news/2014-10-08/keystone-be-darned-canada-finds-oil-route-around-obama.html

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    1. Obama is being ridiculous on this and looking very badly, putting partisan politics above all else.

      Now the 20,000 jobs will come to Canada and the oil sands will still get developed (like Obama was going to stop them).

      The good thing is the actual environment still gets better as a pipeline is used instead of all those trains.

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  15. They just mentioned one idea on the fast money show - DFE. This is a small cap ETF of European securities. The first thought that went through my mind when I looked at the 5 year chart of this was that this thing has already rallied significantly since our QE was announced in Sept 2012. It was up from a low of $35 in Nov 2012 to a high of $64 in June 2014. That's a 83% move. Its down 22% since the highs but its still up 43% from the Nov 2012 level. So how much higher should we expect this to go? Maybe a rally back up to the old highs? The more I look around the more I'm beginning to think it's really important to consider the possibility that it make take a long time to consolidate these gains from the 2011 and 2012 lows.

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    1. IWM has been in a consolidation year this year to allow valuations to get more in line with prices. I don't think European stocks need to do this as they are generally undervalued.

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    2. I still just prefer to focus on the really cheap stocks like the emerging markets.

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  16. If we're still in a bull market, it's time for a snapback rally. Should one fail to materialize, watch out.

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  17. When those ema's roll over it's not a good time to buy, it's time to head for the exits.

    http://stockcharts.com/h-sc/ui?s=BXE&p=W&b=5&g=0&id=p52335521213

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  18. That was a wicked short covering rally. The Russell 2000 is sitting right underneath the old support. Let's see if it can bust through there.

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  19. A lot of stocks look like they could be good buys here. Just browsing around and largecaps like UTX and SAP at lows for the year and then some. I tend to agree with 2nd and either the snapback starts soon or who knows where the bottom is?

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    1. I'm in agreement

      I had to do some big shifts today. I got stopped out of SPXS at $25.5 and re entered EDC at $26.8

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    2. I'm in no mood to buy anything, based on my current paper losses. BXE has handed me my ass.

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    3. Seriously this is the most bi-polar action I've seen in a long time. Look at the move in EDC. It was at $26 thirty-five minutes ago.

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  20. I was in the midst of researching a bunch of those oil plays for a snap back rally but didn't have enough time given how fast this market is. Very bi-polar action.

    SLCA is one that I was looking at. I still think the best play going forward is the emerging market play. A day like today makes you question if the move is for real which is the perfect backdrop for a move higher. Very few people believe in it, especially in light of the bearish trading heading into today.

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    1. I placed a couple of buy orders, then cancelled them as I just got nervous if this could continue or we get slammed again, so it probably does continue up.

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    2. BB - I had about 5 minutes to think this all through and almost came to the same conclusion. In this situation the only thing that helps me is to take a step back and ask myself is this what everyone else is thinking? If so then do the opposite.

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    3. But a lot of stocks have had 3% or 5% or more bounces off their lows earlier today - maybe a lot of funds waiting for signs of a bottom and then jumping in hard.

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    4. Yeah man. I had to buy EDC 3.8% above the lows. I put in two orders just to buy and see how it reacted. When it didn't come back in I had a feeling it was heading higher. Could reverse back by end of day of course.

      A day like today is nearly impossible to trade successfully unless you just came in looking to buy a dip like 2nd did. A lot of people were clearly pressing their bets.

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  21. Wow, even the freaking miners are launching.

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  22. UGA - Gasoline going back to less than $2.50, I think it could.

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  23. "Interesting. It could make sense that we've overinvested in energy production as a response to the $100+ oil and now that demand is weak, the price falls. It is a similar story to the 1980's where companies expanded due the oil crisis, but demand fell because gas was too expensive. A lot of these projects, like the oil sands, need $70 oil to justify themselves, but now that the plants are built, the ongoing costs to keep them running will be much less.

    Hard to say, but I still think energy should do well over the next few years as the economy improves and demand, especially from China, etc. increases with car usage. But lots of factors at play these days that make it complex."

    BB - This is what kept me from buying any dips in the whole space today. Probably not wise given how far down some moved. But think about the evolution of how these major cyclical downturns start. Prices stay dormant for so long no new production occurs. Then demand ticks up due to low prices while production is low which causes prices to rise. Most producers don't believe in the rebound and prices keep rebounding. Eventually production comes in yet prices keep rising. Then prices go parabolic and everyone believes its confirmation that the rebound is for real and they expand production. It happens in every industry. Housing is going through the part at which home builders are starting to believe its for real. I'd say most people believe high oil prices are here to stay. On the sentiment curve I think it's easy to argue that there are way too many long term bulls on energy. Just think what could happen if the demand for oil drops.

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  24. I also bought some of this LAKE stock a little bit ago around $11.5ish. Its another ebola related stock but really it just has had massive volume going through it just like DGLY did before it rocketed higher. I think I'll be looking for a huge volume day of like 20 million shares as a sell signal. The move up seems really orderly given how much volume has been going through so I don't think it has gone through a parabolic phase yet.

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  25. Picked up some GPS after hours for a trade under $39.

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    1. added at $38.4. Seems like quite an over reaction due to a CEO stepping down.

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  26. BB - I think you're wise to hold off on buying since your time frame is a lot longer than mine. If you look at the things that outperformed today its pretty clear that this rebound had a defensive nature to it. XLU outperformed and had a huge move up today. It's only a one day move but there was a shift to defensive stocks. Just look at the biggest gainers today. If we see more of this action then it's a bad sign and I would consider getting even more cautious on longer term stuff. Again, it's only one day though.

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    1. For example, look at the performance of the following:
      http://finviz.com/screener.ashx?v=211&o=change&t=GPRO,MBLY,LOCO,YELP,ED,EXC,JNJ

      Or better yet just flip through these biggest gainers today:
      http://finviz.com/screener.ashx?v=111&f=cap_midover,sh_avgvol_o500&o=-change

      What do you notice on the first few pages? High yield / defensive stuff like utilities, REITs, miners, right?

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    2. Doesn't mean its this big bearish thing just something to keep in mind. There should be a rally but be careful that it only really juices the defensive stuff.

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    3. I guess the utilities were up because the rate expectations were down.

      But because of my investing time frame and because I usually buy something for 50% or more upside, I don't mind missing the exact bottoms. I've done some buying on the way done the last few weeks and, if this bounce continues, I will buy some more things on the way up. As long as my average cost is a lot lower than my average sale, it works out well.

      Could today have been the bottom? Maybe, but who knows. I would have liked to have gotten some things this morning in hindsight, but it's always easy in hindsight. Tomorrow will be another interesting day for sure!

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    4. I'm pointing out the outperformance in defensive stuff only to give you a sense for what kind of rotation went on today. In the past several significant tops (ie 2000, 2007, 2011), the defensive stuff went on to outperform right at the tail end of the tops. We don't want to see this kind of action continue in my opinion. Its still too early to tell but there are other signs technically that this could be a significant top. So far, I'm just playing the bounce. I do think that emerging markets could outperform regardless of what the US markets do.

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  27. So the FED minutes were released today and apparently reiterated the FED was in no hurry to increase rates.

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  28. Outside days on the DJIA, SPX, IWM (Russell 2000), EEM (Emerging Markets), VGK (Europe), and GDX/GDXJ (miners)- all on volumes well above average. Tomorrow could be a very interesting day.

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    1. A freight train came at the shorts today

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  29. http://www.marketwatch.com/story/last-missing-piece-higher-wages-falling-into-place-2014-10-08?link=kiosk

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    1. Excerpt:

      '[Brian Jones, an economist for Société Générale] expects annual growth in the hourly wages of nonsupervisory and production workers to hit 2.8% by the end of the year (from 2.3% now), and for wages for all workers to accelerate from 2% now to 2.4% by December.

      'That may not sound like a big change, but over the next couple of years, wage growth should quicken toward 4% annual gains. Federal Reserve Chairwoman Janet Yellen has said that she believes wage growth of 3% to 4% would be compatible with an inflation rate of 2%.'

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  30. Started curling again this week. Still fall here, but the ice is in the rinks. Means I miss the Tuesday and Thursday market opens. SO will probably miss tomorrow morning, but that's not always a bad thing as too much watching the market can be unhelpful

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  31. If we sell something for tax loss purposes, how long do we have to stay out of it? Is it possible to buy back into the same sector, different stock?

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    1. 31 days to be safe. You could buy another stock in the same sector.

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    2. Thanks, I'm probably gonna peel some off to eliminate my tax liability.

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  32. OIBR - Obviously too early to get into this one, LOL.

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  33. Opening GDXJ (junior miners) @ 33.39.

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  34. -10% - This kind of loss could easily happen overnight, you find out at open. Then it could gain all of that back and more in a day or two at which point it crashes again and gives up 20% at open on the 3rd day.

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  35. KFX- Reading. Maybe this entire space (MITK/MONIF) will never be profitable.

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    1. That's probably right

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  36. MOG at 11:30 today. I'm almost afraid to ask.

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    1. This will be VERY interesting, hope he unloads for us. The energy sector selloff was supposed to begin in Spring, got delayed for some reason. Saudi's pumped up production and oil is gushing in the US, trapped Canadian energy has nowhere to go, EOG is responsible for figuring out how to frack.

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  37. This lake is turning into another dgly. I have a smaller position in it than dgly which I hope will prevent me from getting shaken out. I think it gets to $20

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  38. Last night I thought more about yesterday's trading and it just seems like short covering to me. I ended up booking a profit on edc at 27.35...prob out of haste since it did outperform the us indexes over the past week

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  39. Replies
    1. This stock is insane. I think it could get to $20 today actually. Crazy

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  40. ICPT made a nice move off of the lows yesterday. Wish I had bought more.

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  41. Bought some GPS here following TOF. Hopefully the bottom is in for today.

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    1. I like this trade. I'll take a look when I get back.

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    2. Hey brad - I actually exited last night. I usually only trade these after hours movers in the after hours program.

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    3. Good luck though. I'm just overall concerned about the market.

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    4. OK, thanks. I too am concerned about the overall market. I am holding GPS for now, but will likely sell soon. I am hoping for a bit more of a bounce, but it's not doing much.

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    5. Yeah the plus side on those retailers is that they should benefit from lower gas but the market will most likely take them down with it if we get another leg lower which seems likely.

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    6. I think this ebola fear could have an impact on the economy. the latest is airline cabin cleaners are striking due to ebola fears.

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  42. (a) Failed bounce scenario unfolding in the global indexes. Let's hope the selling fades by end of day.

    (b) In the meantime, I need to preserve gains in the RYWVX trade, which was opened at the 1030 am window yesterday @ 76.67 (the position closed the 345 pm window @ 79.38, a +3.53% gain). It looks like I'll be giving back half the gains!

    (c) One nice thing about miners is they tend to trade 'contra' to the overall market. GDXJ currently bidding 33.81.

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  43. I picked up APT, another ebola affected stock which is actually profitable, at $4.37 avg.

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    1. Was looking at that back under $2.00. It had a big bump back in the SARS crisis, so I guess we are seeing the same here for Ebola.

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  44. Started buying back into EDC at $26.4

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    1. If a rally doesn't ensue before EOD I'll be exiting.

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    2. Feels like we should be buying now.

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  45. BXE - I'm no financial genius but does the chart at the bottom pf page 8 tell us that BXE's EV/FCF makes it richly priced? Seems like it does, and decline rates given on p.7 are rather high at 45%?

    http://www.investorvillage.com/uploads/13942/files/FCFanalysis.pdf

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  46. Took off half of lake at 19.3

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    1. Sold the rest at 18.8

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    2. Man, what a nice gain. Was looking for a safety suit play over a week ago.

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    3. CP - Yeah this was the one. The tell was the volume coming in over the past week. Same as DGLY right before it exploded.

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  47. Classic line from Jeff Saut on CNBC today: "I know old traders and I know bold traders, but I don't know both."

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  48. TSN - That one looks a little stronger than anything I have in my port. Well, I only have a couple positions.....

    The early bird gets the worm, huh?

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  49. (a) DJIA -322. In my opinion, that's a failed bounce!
    (b) VGK (Europe) -3%, and well below yesterday's low. Failed bounce with a kicker.
    (c) GDX -5.3%. Failed bounce, but remains well above yesterday's capitulatory low.
    (d) GDXJ (junior miners) -7%. I finally stopped out of my morning trade around 32.40. Currently 32.06.
    (e) RYWVX (Rydex 2x Emerging Markets) closed the 1030 window @ 78.54, locking in a +2.4% gain on the trade. That's the only positive I see today.
    (f) Even bonds are selling off. TLT currently off -0.26%.

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  50. Reopening a position in RYPMX (Rydex Precious Metals) at the close.

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  51. Took off 1/3 of my APT at $4.7-$4.8. Could have a nice day tomorrow as well given the volume and fundamentally its a stronger company than LAKE but just paring down risk.

    Sold off my EDC as well

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  52. Leon Cooperman - "We have got what I call an economic stress list," Cooperman said. "Inflation is generally accelerating ... the yield curve is inverted, employment is declining [and] leading indicators are declining."

    Inverted yield curve suggests recession is being forecast, right?

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  53. I sold out of everything heading into the close. Probably stupid to not take a step into the batter's box on some of these things but I've learned from past mistakes that the bottom falls out when things look really weak, not when they're strong.

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    1. Jeez APT is up another 15%+ after hours

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  54. Added to my position in Assured Guarantee (AGO) at $21.94 at the close. Maybe the market continues down from here, but at this price, I am fine to buy and hold for a couple of years.

    I really don't think that we are at the end of the bull market, but still have quite a bit of cash and plan just to continue buying into weakness. In my experience,Likely if I wait for a bounce, the prices will be higher before I recognize it, even if we do go down further first.

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  55. Check out this post:
    http://ibankcoin.com/mr_cain_thaler/2014/10/09/breakeven-for-the-year/

    Where on the following chart would you place his sentiment regarding energy?:
    http://ibankcoin.com/option_addict/files/2013/05/sentimentcycle.png

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    1. He sounds like panic and it may be. Guess he is not diversified!

      But look at JONE - stock having a solid year and now straight down 30% this month on no news.

      Still holding, but I can see people getting panicky for sure.

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  56. TOF, meant to respond to your comment on energy before.

    You may be right that we've overinvested in energy and now have to work off the excess supply. It is a complex market and not all the participants are traditionally logical. Look at how the Saudi's flooded the market in the 1980's to help bring down Russia. There is now talk they may let the price fall below $80 or even $70 to try and crush the frac companies who are supposedly highly levered and need high prices to be profitable.

    The reasons I like energy are that it is used up and not recyclced, demand is consistent (mainly transportation), supply increases generally only come with higher prices, and it has been long term profitable.

    The other thing I think about is, for me, I generally like to have a diversified portfolio and having some resource stocks generally act as a hedge should inflation come back. If energy does continue down, I do have consumer stocks which should do well as consumers spend more.

    We'll see what happens. I know a lot of the big value guys are in energy now, so that should help provide a floor and, if we can get some firmness in oil prices, valuations are low and stocks could get revalued upwards.

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  57. Didn't watch Ichan, but here is the Globe Summary. Seems like he is just hedging his stock exposure to play for a correction and not going short or selling stocks he likes. I think a lot of people are in the same boat of liking certain stocks, but not the overall market:

    Investor Icahn sees stock market correction coming -CNBC
    14:38 EDT Thursday, October 09, 2014
    Print this article
    By Svea Herbst-Bayliss and Sam Forgione

    Oct 9 (Reuters) - Billionaire investor Carl Icahn said on Thursday a stock market correction is "definitely coming" and he is worried about the economy, as U.S. stocks tumbled on fresh worries about global growth.

    Icahn told CNBC in an interview that he still has a lot of money invested in the stock market and has taken measures to protect his portfolio.

    "I've been putting on quite a bit of hedges," Icahn said, adding that he was shorting the benchmark Standard & Poor's 500 stock index, which was down 1.77 percent.

    The blue-chip Dow Jones industrial average tumbled more than 300 points, or 1.78 percent.

    In November Icahn said at a Reuters Summit the market could "easily have a big drop," a sentiment he reiterated on CNBC.

    "I've been quite concerned for the last year or so, but we still have a hell of a lot of stocks in our portfolio, so ... but I have a lot of hedges on," Icahn said.

    Asked about a possible stock market correction, Icahn said, "It's definitely coming."

    Stocks had rallied steadily for months, underpinned by central bankers' easy money policy designed to stimulate growth. But "you can't keep an economy up just with the Fed," Icahn said. "The Fed alone can't do it."

    Icahn was being interviewed with his son, Brett, and another portfolio manager, David Schechter, about their open letter to Apple Inc urging the company to buy back shares.

    Brett Icahn and Schechter said they still own shares of on-demand media company Netflix, another of their big and successful investments.

    Icahn senior took a swipe at venture capitalist Marc Andreessen after eBay Inc last week decided to spin off PayPal. Icahn has contended that Andreessen, as a board member of eBay, had a conflict of interest when eBay sold off Skype and said "Andreessen has screwed more people than Casanova."

    "I went after him hard for stealing Skype from eBay," Icahn said. "I am no fan of Andreessen," he added, noting his "high squeeky voice that only a dog can hear."

    The two investors have a long history of calling each other names.

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    1. I have a problem with a guy like Icahn making those comments. I think part of him thinks in part he can weigh on the market with his words and hopefully present him with good opportunities. He habitually pushes his own stocks. I think a lot of what he does borders on shadiness.

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  58. CVEO
    Einhorn takes 9.99% stake in Civeo, says CEO should be replaced
    David Einhorn's Greenlight Capital discloses a 9.99% active stake in Civeo (NYSE:CVEO) via a 13D filing, and says the lodging company working in the oil sands area should take on leverage to make its capital structure more appropriate for a real estate company, and should replace CEO Bradley Dodson.The hedge fund also says CVEO should implement an aggressive program of returning capital to shareholders through a dividend policy.

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  59. ENSV down huge of late. That one intrigues me.

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  60. Oh my, did we hit a little bump in the road?

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  61. Nothing to buy or water water all around?

    "By
    Kai Kupferschmidt
    9 October 2014 7:54 am
    Comments

    The Ebola epidemic in West Africa is growing exponentially and models show there could be hundreds of thousands of cases in a matter of months. Researchers are beginning to look beyond the models and at possible scenarios to prepare for what might happen next. Among the things they worry about is an increased risk of spread to new countries, changes in the virus that might make it endemic, a rising mortality from other diseases, and food shortages. Vaccines and home care kits might help curb new infections; whether travel bans are useful to prevent the spread of the virus remains a topic of debate."

    www.sciencemag.org

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  62. GE - Announces it intends on making money.

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  63. XLF - Holding up pretty well, are banks buying back stock near highs ahead of the impending trend breakdown? Thought banks were supposed to lead, seems they're following?

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  64. ENSV- What's the deal with this one again?

    MOG comments- EU isn't great but the real drawn down on oil is China. See's 80-100 over the next year with more time near 100. Shale plays really close to 80 now and not the widely reported 70. Oil sands 80+. Could see further price pressure in the e&p guys as spec money moves out and value money moves in. I suspect I will scale in more as the price drops for a year long hold.

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    1. A lot of the value guys said Europe is the place to look for cheap global integrateds. They all talk about how companies like BP, RDS, TOT are cheaper than than XOM or COP.

      Of course we can try and do better with smaller companies (and many have dropped a lot), but energy is one of those industries where the inefficiencies of being big seem to often outweigh the nimbleness of being small.

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  65. Here's a random crazy thought! TLM might be a buy soon.

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    1. How much have you had to drink tonight?

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  66. We're looking for a 3-4 year lease on a 3 rows vehicle. Leaning toward the Ford Explorer and Infiniti QX60. Any other recommendations? No Mini Van!

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    1. Go for a test drive. My 1 Ton Econoline Club Wagon is 4 row. Haven't driven it in years, sits in the garage dusty as heck.

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    2. Consumer Reports recommends the Infinity, but not the Ford. Probably the Ford would be fine for a year lease though as any new car nowadays is good when it is new.

      Infinti:
      Buyers looking for a spacious, quiet, luxurious, and well-finished interior with room for seven without the bulk of a full-size SUV should consider the QX60. It has a comfortable ride but handling lacks agility. Its 265-hp, 3.5-liter V6 and continuously variable transmission deliver smooth but just adequate acceleration and returned 19 mpg overall on premium fuel. However, towing capacity is a low 3,500 pounds. A family-friendly feature is the ability to gain access to the third row even with a child seat installed in the second row. A hybrid version with a 2.5-liter, supercharged four-cylinder is new for 2014. First year reliability has been average.

      Ford:
      The Explorer shares its car-based platform with the larger Ford Flex. The roomy and versatile interior is well finished and offers a usable third-row seat. Handling is secure but not particularly agile. The ride is steady and absorbent. The standard 3.5-liter V6 is punchy enough though a bit rough. A 240-hp, 2.0-liter turbocharged four-cylinder is available only on front-wheel-drive models. The interior is well-finished and relatively quiet. The optional MyFord Touch control interface is complicated and distracting. A terrain-select system facilitates light off-road capability. Reliability has been well below average.

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    3. If price is compatible I'd probably go for the infinity. Not sure if it's unibody or built on a frame but the Ford might do better in an accident, they used to be built pretty heavily.

      Towing capacity has a lot to do with braking capacity, put larger brakes on and capacity goes up. Might also be a little tougher suspension.

      I've always like the quality of the materials Ford started using in the 90's, Toyota was still using ABS plastic last I checked and Ford uses HDPE which doesn't crack and splinter in an accident.

      So I tend to think the Ford would protect passengers better in an accident. Plastic panels under the dash, etc. that crack and split present sharp pointy objects that can cut you.

      Infinity seems to be very refined and perhaps the Ford not as much but I haven't looked at the newest models.

      Not sure about the turbo, probably explains how Ford is able to improve fuel consumption and those used to be rather troublesome back decades ago, probably reliable as hell nowadays.

      I do like the Ford interior materials. Watch out for those hard easily split and cracked and in an accident interior plastic panels, think about that.

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  67. Long spxs this morning at 26.32. Still think this is the hardest trade to make but the right one

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    Replies
    1. Good luck and it is the hardest one. I would think we get a bounce this morning, but maybe the selling yesterday has scared a lot of people and we get dumping of stocks at the open. Futures are down.

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    2. Yeah another bad trade on this one. Tough cookie. I did add to my position at $25.88 but avg is like $26.15. We'll see.

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  68. I'm seriously thinking it might be time to look at miners again.

    Not iron ore or coal which I think are hugely oversupplied, but look at these copper inventories at the lowest levels in 5 years: http://www.kitcometals.com/charts/copper_historical.html

    Have to do some more research, but pretty much everything becomes a buy at some price and maybe the copper stocks are there.

    ReplyDelete
    Replies
    1. FCX would be the logical first play that comes to my mind on this.

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  69. it seems like the energy sector is getting taken down just like the small cap / momentum stocks did this spring. but the S&P 500 held in through that downturn. It could do the same here again - something to consider for sure. I’m looking to the most oversold stocks in this past month in that sector right now...similar to when YELP got down around the low $50’s and returned 40% in a month or two. Some of those stocks will make massive moves. SLCA is one I’m watching closely. That entire sector is in the dip buying phase...the avoid phase is quickly approaching.

    ReplyDelete
    Replies
    1. Trade of the year part two I'm thinking.

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    2. Yeah I think this is gonna be a really good trade the more I think about this. Take a close look at the divergences in YELP for a signal. The RSI low in YELP came on 4/4/14 when the price hit $66. There were 3 more bounces after that and each time the RSI crept higher. On its ultimate price low on 5/7/14 RSI was 32 (vs 25 on 4/4). I think this is the tell to watch closely for.

      Now it comes down to picking the right stocks. My initial thinking is HCLP, EMES, SLCA. Still looking.

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  70. Sold SPXS at $26.33

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  71. TLM/SD/XCO et. If those arent waterfall patterns I've never seen one.

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  72. Long small positions only for a short term trade in SLCA / HCLP / EMES

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    Replies
    1. Oil is diverging a bit here. It may only be a bounce but I think it's tradeable.

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    2. I'm keeping these positions small and just trying to play a quick trade. The bigger trade will come later when you start seeing positive divergences over a period of a few weeks.

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    3. HCLP 39.6 avg
      EMES 77.9 avg
      SLCA 46.2 avg.

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    4. Dang. These are tiny positions for me and they're down huge in like 15 minutes.

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    5. HCLP looks like the strongest given the yield. I'm actually up after averaging down. I added to all 3.

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    6. My guess is these should bounce soon here then continue lower potentially with RSI's trending up. The only catch in my mind is that they all have solid earnings underneath them whereas the YELPs etc didn't...

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    7. This is nuts, now I'm up nicely in all but SLCA. Only got my avg down to 45.5

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  73. NWLI is coming to me, yee-ha...
    ENSV - Wheeeeeeeee...........

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  74. DAMN! Some of this price action is amazing.

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  75. XLF/RTH - Maybe these will produce some clues. Copper too, of course. SCCO under $25???
    What's a reasonable PE for an oil stock, about 3~4?

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  76. Even the rails, which people love, getting crushed. CP down 8% UNP over 3%.

    2 ways to look at it:

    1 the economy is taking and the rails are economically sensitive and go down too
    2. people are getting scared and even selling the stocks they really like

    ReplyDelete
    Replies
    1. Honestly, I think it all comes down to margin calls. The economy isn't tanking. But a shit ton of people were hiding in the energy services crap like HCLP / SLCA / EMES etc. It was the "safe" place to hide. Today reeks of a panic drop in all of them...ie a good spot for a bounce.

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    2. Given they all hid there then most likely they need to sell in other areas to cover calls. They sell the winners. Some are probably holding these still, sure that they are guaranteed long term winners. Those will be liquidated on the next bounce. That's where the RSI positive divergences will start showing up.

      Delete
  77. ICPT - Okay, this one's on sale. Get 'em while they're hot.
    OIBR - Heading off a cliff as well.

    ReplyDelete
    Replies
    1. Sold most of my ICPT at 219. Waiting on the market to decide if I buy back in today or maybe next week

      Delete
  78. CVEO is interesting. only up 4% on the day after Eichorn announced his 10% stake and called for the removal of the CEO. It's still down 50% from before they announced the no conversion to REIT.

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  79. Hey BB - Look at the bright side of all of this trading: You sold NM 100% higher. 100%!

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    Replies
    1. This makes ship scrapping look incrementally more attractive.

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  80. Ended up selling SLCA at $45.9 for a small gain. Keeping the other 2 which are up a good deal more. Using the momentum stocks as a guide post.

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    Replies
    1. SLCA is NOW, HCLP is PANW, and still trying to figure out what EMES is. HCLP could be a good buy and hold right here.

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    2. HCLP and EMES were both yielding almost 6% near the lows of the day. They should bounce hard.

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  81. CP - Everybody likes me? Thanks, man! :)

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  82. TOF,

    Could be right on margin calls. Seems like stuff getting thrown out now. Tempted to add more to energy stocks today. Unless the whole supply / demand is out of whack and oil crashes, seems like it should do well. Wish I knew what the Saudi's were thinking and if they wanted prices up or down.

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    Replies
    1. Even "safe" energy stocks like SU seem like they will do well at these prices and the risk is reduced because they are an integrated energy company.

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    2. At the very least Brent, I think there's an opportunity for a short term rally. I included a link to that blog post yesterday because I think that was a major tell on sentiment. I love reading stuff like that because you can really gauge how everyone is feeling.

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    3. Fact is we're here to make money. That involves taking risk.

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  83. Long ERX at $75.2

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  84. TPL - These guys own land in the oil patch maybe?

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  85. ETP - Was nearly $56, sweet dividend.

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  86. How much oil comes out of West Africa and how much will air traffic be cut with Ebola outbreak? One Million to become infected by January?

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  87. CP - I think Canada wants to export, CP would be one mechanism for achieving that. Kinda wondering if there's a link to the Russian oil industry and placing downward pressure on oil to squeeze Russia?

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  88. Wow what a move in these energy names!

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