Thursday, April 30, 2015
4/30/15 'And all this science I don't understand'
An unusual mix of strength in oil and commodities (other than precious metals) worked to my advantage today.
(a) A -3.3% loss in the first tranche of RYWVX (Rydex 2x Emerging Markets) was offset by a +0.5% gain in the second tranche (which unexpectedly closed higher @ the 350 pm window [compared to the 10 am window] despite a lower finish for EEM- presumably due to strength in iron ore/copper miners and oil exporters).
(b) The above was also represented by a strong finish in EWZ (Brazil).
(c) RYEUX (Rydex 1.25x Europe) closed -0.43%, offset by a +0.32% gain in RYGBX (Rydex 1.2x Government Long Bond).
(d) RYPMX (Rydex Precious Metals) closed down just -2.28% (compared to a -2.94% drop in GDX) thanks also strength in companies like FCX (Freeport McMoran) and Brazilian miner VALE.
(e) Speaking of VALE, its +11% rally from my opening basis of 6.94 more than offset a -3% drop from my basis in Goldcorp.
(f) TWTR (Twitter) seems to have found short-term support, closing up +1.22%
All in all, the portfolio closed the day down just -0.18%- unreal considering a -195 point drop in the DJIA + a -1.52% loss for EEM. I take no credit for the outperformance apart from saying I opened all positions trading (as usual) against my perception of crowd psychology. The rest can be attributed to the 'science I don't understand.'
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Jessie very positive on Nat Gas in his latest newsletter.
ReplyDeleteI hadn't really thought about nat gas prices rising significantly. I thought maybe up $1 or so on mean reversion and possible spikes in the winter. But a bull market on nat gas prices was not in my thoughts at all.
But this kind of thinking is the type of apathy you'd expect to see after a commodity (or stock) had done nothing for so long.
Would certainly help BXE and some of my other Canadian small cap energy stocks.
FWIW - from another bulletin board from someone bullish on FCAU:
ReplyDeleteQuestion to everyone that's been following Fiat. If you had the three presentations that were posted yesterday (earnings, consolidation, and NAFTA margins) before the market did, would you have expected the stock to be up or down?
The NAFTA margin target of 7% in Q4 and 8-9% by 2018 is a huge positive. The five year plan only assumed 6-7% margins in NAFTA! Yet somehow the article headlines for the day were "Marchionne panicked because sales are rising but margins are falling."
And quantifying 2.5-4.5 billion euros a year to be saved from M&A is huge. Also finding out Brazil will break-even in this kind of economic environment is very positive news.
My 2 cents, Sergio was trying to talk the stock price up (clearly didn't work) because the holdup to M&A is the current stock price, he doesn't want to split up a MergeCo based on todays equity value. He specifically talked about how embarrassing the valuation is in the exchange with the analyst who asked who is this presentation addressed to and told him he had more say in this then he thinks.
LNKD the latest high-value momo stock to get trashed.
ReplyDeleteI go back to my one friend who was a good tech investor and he told me the best growth tech companies should trade at 8 times sales. LNKD, even after this mornings trashing still trades at a p/s of over 11.
I've lost contact with him, but would be interesting to see if he still believes this and what he thinks of current tech pricing.
I've never bought anything through LNKD, do they sell stuff? Who are they extorting to obtain income?
DeleteVALE off the table @ 8.04 (+16%!).
ReplyDeleteOver the last 3 days my port hasn't changed more than a couple hundy either way. Kinda wired.
ReplyDeleteMITK- Looks like Jimbo's act is wearing thin...or no one left to listen?? I wonder if Bevon is still there!!
ReplyDeleteBanks are joining in the e-payment scheme in big ways, it's kept me away from NCR. Not sure NCR has the girth or even foresight to see into the future but look at RAX go baby.. What's your bro up to, he must have some of this figured out?
DeleteKCG - Wasn't this the one that got so beat up over a trading snafu?
ReplyDeleteNo. Not that one.
DeleteEYES - SOAB, I sold 2/3 at the low?............
ReplyDeleteFCAU - Obviously the crowd remains unimpressed by a fully priced stock and wants a discount for taking risk.
ReplyDeleteFCAU- Touched the 100ema to the penny. Probably should settle here I would think.
ReplyDeleteGM looks ready to move up unless a bomb goes off somewhere. $51 target on this one.
DeleteEVBS - Nice tight BB's
ReplyDeleteRental prices have surged at 2x rate of income. Wall Street Landlords know the sheetrock and carpets will be torn up.
ReplyDeleteKNDI - Tight BB's high short float. Hmm... anticipating a crash landing or about to rocket?
ITB/USG/TREX about to party hardy? How's the revenue look for these?
Gimme another leg down, just do it.
ReplyDeleteHad a bunch of stuff to do this morning. Sold my gild and bought a 25% position in chk at 16.2. Bought met and afl as well. Still holding ewt
ReplyDeleteSold chk at $16.56 hoping for a dip to re enter
DeleteTSLA "Powerwall"...I want one.
ReplyDeleteI'll use it to charge my GOOG Glasses.
DeleteWhat was the name of that ticker that had high hopes of mass manufacturing batteries and just kept sinking, this idea doesn't strike me as particularly inventive. What about the EV car that powers the whole house, where'd that go.... Batteries don't make energy....
DeleteI plan to close all positions, including the two tranches of TWTR (Twitter) by end of day.
ReplyDelete(a) EEM (Emerging Markets) +0.7%, which translates into +1.4% for RYWVX (Rydex 2x Emerging Markets).
(b) VGK (Europe) +0.58%, which translates into +0.73% for RYEUX (Rydex 1.25x Europe).
(c) GDX (miners) +0.35%, which may translate into +0.5% for RYPMX (Rydex Precious Metals) as the fund includes copper/iron ore producers (both of which are flying).
(d) TLT (long bond) -1.23%, which translates into -1.5% for RYGBX (Rydex 1.2x Government Long Bond).
(e) TWTR (Twitter) off @ 37.91 for a -7.6% loss. With both YELP and LNKD (LinkedIn) also off >20% this week following earnings, a turnaround in social media is unlikely to be imminent.
(f) Goldcorp off @ 18.70 for a -3.85% loss.
I have little faith in global markets at current levels. 100% cash going into the weekend.
Mark- Believe it or not, my Glass is still sitting unopened in its original box! How long did it take you to set up/become proficient at using?
ReplyDeleteI only use it for fun. There really aren't that many great apps and it's kida clunky, but it easy to use. The best use really would be driving directions but apparently that's illegal.
DeletePicked up gild big position
ReplyDeleteWhat's the story?
DeleteYou could say it's the mirror image of TWTR.
DeleteVery, very cheap (9.5x FCF / Earnings). Risk is that competition comes in on the Hep C market and they don't grow. But they are generating a ton of cash and will use that cash to buy growth (they mentioned acquisitions on the CC).
DeleteI think it could run another $15.
Chart for WPRT looks freaking good
ReplyDeleteI ended up moving to all in today between GILD, EWT, MET, AFL, and I bought some GM as well. I'm sticking to bigger cap dividend payers that are cheap. I just see too much risk in other sectors. I do like the nat gas space but hoping for a pullback. I almost bought some DB today. Today confirmed for me my gut feeling yesterday that IBB won't crash until this fall. I will be prepared for that and wait for a potential setup there. I think GILD can run to $120-$130 with an acquisition / dividend boost which should get the biotechs to new highs. The way biotechs are setting up is very similar to the way the market set up heading into the October 1987 crash. Remains to be seen if that transpires but its something I have my eyes on for sure in the bigger picture. BIS could be an epic play come this fall if it sets up the same way.
ReplyDeleteARII - Love learning about this stuff AFTER HOURS, wonder why that's so often the case?.
ReplyDeleteI can understand why Glass hasn't taken off.
ReplyDelete(a) No apps. Forget about streaming quotes and trade execution.
(b) Battery life. A few songs on Google Play will wipe you out.
(c) Photos/videos-> execution beats smartphone, but you'll give up picture quality.
Right now, I'll take the iPhone over Glass.
The dollar has bottomed is my bet. Same pattern as the Yen back in June 2013, after a massive move up. Moves sideways in a wedge for the next few months...then breaks out to 105 or so in September / October, which prompts a correction this fall. Biotechs take a 15 to 20% drop then.
ReplyDeleteNext target: 115 for dollar in about 12 to 18 months. Move occurs around election which prompts a 20% drop in the markets.
This is all bullshit but its my current thinking.
10% would be my guess. Unless there is other 'news' there are way to many players who have missed out to not jump in before then.
DeleteYeah I'm guessing we get a 10% drop in the fall for the overall market and 20% in biotechs. I'm going to be very cautious going into next year.
DeleteBMO - It was a good month, I'd be tempted to cut it lose.
ReplyDeleteDamn, this FOSL sure as hell is setting up for a big move on earnings Tuesday. I might take a stake in it. I'm guessing that the Apple Watch fears are completely overblown and it turns out to be a helluva buying opportunity for FOSL. Its a dirt cheap stock.
ReplyDeletePiper Jaffray set a $72.00 price target on Fossil Group (NASDAQ:FOSL) in a research note issued to investors on Monday. The firm currently has a a sell rating on the stock.
DeleteAnalysts at OTR Global downgraded shares of Fossil Group from a mixed rating to a negative rating in a research note on Thursday, April 23rd.
Analysts at Telsey Advisory Group downgraded shares of Fossil Group from an outperform rating to a market perform rating and lowered their price target for the stock from $105.00 to $94.00 in a research note on Friday, March 6th.
I bought back into EYES this morning. 6% position at 11.86 avg. Earnings on 5/13/15. I like the risk / reward still.
ReplyDeleteI'm willing to add lower, assuming it happens.
DeleteI added more around $12.15 today..up to a 10% position. I like the potential for this to really crank higher on some good news. Seems like even if it dropped to $10 some news would come out of left field and the stock would be up to $15+
DeleteShit I'm thinking that I took profits on DGLY / TASR a little too early at $14.x and $30ish.
ReplyDeleteSeems like Marchionne really rubbed some people the wrong way with the merger talks. I was wondering when that would wear thin...apparently some analyst was arguing with him on the call and then there's a mention of it here today with regards to GM:
ReplyDelete"Fiat Chrysler (FCAU) CEO Sergio Marchionne may be sounding the bell to consolidate the auto industry, but his peer at GM doesn't appear interested. Mary Barra says she hasn't talked to Marchionne, adding GM has its own plans for the future. "We have articulated a very-detailed plan on what we are executing going into the early 2020s," she noted following a $174M plant-investment announcement at the auto maker's Kansas City facility. "We are working hard on that, and we are not going to let anything distract us. Our plan is well-positioned.""
"I'm weak, let's make a deal" just sounds way too dumb to be real.
DeleteI've been following Exact Sciences (EXAS), a biotechnology company based in Madison, WI. One of their products, Cologuard (how many patients might prefer an alternative to a colonoscopy!), was recently approved for coverage by Anthem Blue Cross. At that point, I started to track the stock more closely.
ReplyDelete(a) EXAS announced earnings this morning ('beat') + hosted a very positive conference call: http://finance.yahoo.com/news/exact-sciences-reports-strong-growth-090000965.html
(b) There were reports last winter that hinted at strong growth: http://host.madison.com/business/exact-sciences-hiring-soars/article_3517c053-162e-5f65-8078-1fc94cb3deb1.html
I opened a starter position this morning around 24, and we'll see how it goes.
Reopened UGAZ @ 2.42.
ReplyDeleteI was looking at NG a lot last night. I had been thinking the fall was the right time to enter the trade (due to easier comparisons from prior year storage / injection levels) but looks like a lot of people are jumping the gun. The LNG exporting should start up within 8 months or so and that could change sentiment. I wouldn't be surprised if UGAZ is a good 12-24 month buy and hold here fairly soon.
DeleteI tried this with my LinkedIn photo, and Microsoft estimated my age as 34.
ReplyDeletehttp://how-old.net/#results
Small position in RYTPX (Rydex 2x Inverse SPX) into the close.
ReplyDeleteI struggled all day today with UGAZ. never took a position, though. I know I will regret it.
ReplyDeleteI'll offer the same advice someone here (maybe it was you!) gave me once. If you're agonizing over whether to open a position, start small. Then add/subtract (or even close) as the day goes on. O/w, we tend to waste a great deal of emotional 'energy' over the decision the rest of the day.
ReplyDeleteI agree...for me it wasn't about the size of the trade....but rather whether or not I should avoid my plan (to buy later in the summer) I've had in the back of my mind for 6 months now.
DeleteNWLI - Looks like higher rates maybe aren't so good for life insurance. The mREIT I follow has far outperformed NWLI
ReplyDeleteNLS $20 ah on huge beat. What a home run that's been
ReplyDeleteI really regret not buying and holding that one.
DeleteGrabbed 1% position in ugaz at 2.47. Will add over time as I think this is a 18 month play
ReplyDeleteMeant 3% position
DeleteTOF,
Deleteare there concerns with a triple ETF on a commodity or has this changed? The main concerns being the time decay we saw in UNG because of the contract rollovers and then also the decay we had in the triple bull and bear financials which caused them both to lose a lot of money (I think 80% and 90%) in a couple years after the financial crisis.
Not if it trends up which is my assumption. No one is calling for that now. With exports coming online and coal being displaced by epa there's going to be significant demand ongoing
DeleteI think the triple ETF is necessary to beat the forward roll of the contracts, gotta get the direction right. I guess the gain on a 1x won't be very spectacular as the rolling forward is expensive.
DeleteENPH - Reports tomorrow after close.
ReplyDeleteAEIS - We believe margins will continue to improve as the company exits the non-profitable inverter
business (-26% 1Q15 operating margin), and reiterate our Buy rating. ($31 objective0.)
CP,
ReplyDeleteYou never know for sure of course, but I think the weakness in NWLI is more a company specific issue than a rates issue. Brazil is after them for selling policies in their country without a licence, but the reality is they have an arms length agreement with distributors in Brazil and issue policies from Texas using US law and US $'s. The fact that someone from Brazil buys a Texas life policy does not mean NWLI is selling policies in Brazil. This has been brought up by Brazil before and gone nowhere, but this time someone from Texas has agreed to look into it, so some holders are selling to reduce risk would be my guess.
BB, I suspect you're selling NWLI to whomever will buy it.
DeleteEYES - If this one can reach $37.60, I'll break even. :)
ReplyDelete$16.25, LOL, my bad.
DeleteI was gonna say!
DeleteTCK + 51% off 52wk low
ReplyDeleteNWLI +8% off 52wk low
I'm so damn skittish in this market it's definitely causing my returns to be lower than they otherwise would be this year (although I guess I could say I've missed big losses because of this...case in point is EYES). If I have a 10% gain I'm most likely out, which of course ends up turning into a 20%+ gain like TASR / DGLY. Oh well, just keep thinking that the key is to keep gains.
ReplyDeleteNWLI - I've looked at this and it does look cheap, but I guess for good reason? I have MET and AFL, both of which are very cheap but big cap which I feel like means lower risk but these insurers always have lots of hidden risks from what I've noticed.
The setups I really like right now are either really big cap companies, banks, nat gas, or smaller positions in beaten down ones like EYES that have a chance of doing a moon shot out of nowhere (as long as there's a clear stop out point). But I just feel like all are rentals.
Also seriously contemplating 10% or so positions in GMCR and FOSL heading into earnings. The question is: should I just go to the casino?
DeleteI's much rather ride stocks up as opposed to down. I mean, if you're gonna ride then at least ride only those going up.
DeleteNWLI is very cheap, but so are pretty much all the life insurers and big banks. People are worried that if rates never go back up, like Japan, these stocks will never get back to generating higher ROE's and won't pay up for them. And some will be in trouble if this happens. The P&C insurers, which have most claims less than 1 year and shorter term investments, have rebounded much better since the financial crisis and trade at similar multiples to previously.
DeleteThe reason I like NWLI specifically is because it has the strong book value and EPS support and is one of the best run small life insurers (some are quite poor). The reason it has a such a low valuation is that it's CEO started the company, is a controlling shareholder and is only concerned about growing the business and not about the share price and dividends. But he is 78 and some of the other board members, including the COO (his son), have indicated that they feel they should do more to help the stock price like share buybacks.
The current price weakness almost certainly is Brazil related, but I am quite certain nothing happens, but you never know for sure when the lawyers are involved.
One of the things I am quite certain about is you want to invest to take advantage of rising rates. Very smart guys like Buffett, Tepper and Grundlich are all talking about rising rates/shorting bonds and I agree with them. You could go long TBT or something, but I think it is easier and safer to use the long duration financials. You could buy a large cap lifeco like MET or a large bank like BAC - both are cheap and will go up when rates rise. But I prefer the safety of NWLI provided by its high discount to book, consistent earnings and low p/e.
I agree they are talking about rising rates, but I do not get the sense that any of them think rates are going to rise a lot. We will be lucky if fed funds goes up 50 basis points in one year, imo. Is that enough juice?
DeleteBB, do you think if the mkt had a 10-15% correction NWLI would hold up or just basically fall with mkt?
TIA
BXE - Here's the earnings report: http://finance.yahoo.com/news/bellatrix-exploration-ltd-announces-first-060500293.html
ReplyDeleteI think the BXE numbers were alright. A loss, but positive cash flow which is how most people value energy companies and a beat of estimates. Sounds like their nat gas processing plant is going well too.
ReplyDeleteShipper ASC also had a beat and big increase in earnings and revenues due to more ships and higher rates and rates for Q2 are up another 10% over Q1.
FCAU trying to fight back above $15. Looks like the brokers for the Ferrari IPO have been picked and sounds like Ferrari pushing a bunch of cash up first, so maybe this is the start of the excitement around this.
NLS - Wow man, a 15% day.
ReplyDeleteTDW - Getting away from me.... :(
ReplyDeleteJesse sent out a tweet about commodities. What ETF do we use?
ReplyDeleteDBC maybe? I dunno if $US is headed up or down. Or rates.
DeleteDoes look good on a LT chart.
DeleteINVN - Oops, comments I read sounded positive.
ReplyDeleteISNS - Wow this one too. Is there a new boy on the block? I think I heard something....
T3d,
ReplyDeleteI think if we got a market correction, it would depend on the reason as to whether or not NWLI falls.
I could see the scenario where a lot of the yield plays like utilities, consumer staples, Reits get hit pretty hard by rising rates and pull down the broad market as they are pretty big, but the financials including insurers and NWLI actually go up.
Or I could see a biotech / healthcare bust pulling things down, but financials doing well because of their low valuations as people look to deploy cash.
But if we get a broad market sell-off due to something else like a recession or political problem, then the whole market including NWLI would fall.
Based on the number of locations open at the end of 2014, Shake Shack's current stock price values its restaurants at $40 million each, four times the stock market value of a Chipotle restaurant and 15 times the value investors assign to a McDonald's Corp (MCD.N) restaurant.
ReplyDeletehttp://www.reuters.com/article/2015/05/05/us-restaurants-stocks-analysis-idUSKBN0NQ0A320150505
Its so preposterous.
Delete(a) Closing RYTPX (Rydex 2x Inverse SPX) at the 1030 est window for what should be a +0.6% gain.
ReplyDelete(b) Added a second tranche of EXAS (Exact Sciences) on this morning's pullback.
(c) Note that TLT (long-dated Treasurys) are continuing to sell off today, now Day 12 of a remarkable -7% decline. I'll be looking for an entry into RYGBX (Rydex 1.2x Treasury Long Bond) today or tomorrow.
KEX - Closed gap down and TDW is having a great day. I have no idea of why all of a sudden these moves...
ReplyDeleteBAS - Over 100% from 52wk low now. Unreal and amazing to me, some of these energy service companies are on a major tear. It feels so dangerous, but they were sold off so hard. Sold for a poor reason or just a "little" bounce?
ReplyDeleteAfter my fiasco with SVM and now with BXE, I can't afford another huge mistake.
I'm afraid to touch anything in the oil space....which probably means it goes higher. Kind of starting to feel like the S&P felt in May / June 2009...when things just never came back down.
DeleteI know a few hedge funds from my old job that are betting big on an oil recovery due in large part to the # of bears. This is what has me interested in UGAZ which I added to today.
You can always play small too CP. Nothing wrong taking small positions in risky situations.
DeleteI'm also torn on this energy bounce. The large caps have done quite well, but a lot of the small ones are still way down. If I had faith, I'd rotate down in size, but reality is, no-one really knows, so I'm just staying diversified across market caps.
DeleteTook MET and AFL off. Sold my GILD for a loss. I believe I broke even on the three combined. Added to UGAZ in the $2.41 to $2.45 range.
ReplyDeleteSWN is maybe another way to play natty.
DeleteI looked into a few of these and most of them have way too much debt. It's probably dumb to write them off but I feel like if Nat Gas does trend higher over the next year or more then the best way to play it is probably just buying the ETFs.
DeleteRIG is another, the secotr is on fire and I'm the only one even noticing, incredible.
ReplyDeleteI think a lot of people are noticing and in the same boat I am...just a spectator.
Deletea lot of the value guys are in energy too. But many of them had large positions before oil crashed as the stocks were still cheap relative to the price of oil then as well. I think many of these types of his last year's would have just held on and written it down and now back up.
DeleteHigher rates generally aren't good for energy, lol, I thought.
DeleteHigher rates because of increased economic activity which will drive increased fuel consumption will be good.
DeleteOne thing regarding Nat Gas - Wasn't one of the arguments for why it should be so low that it was a by product of the shale drilling and almost just discarded at any price? If production has dropped in that region then shouldn't nat gas production have dropped as well? You guys know how this shit works....it's really a bunch of bull so it all comes down to what can drive sentiment.
DeleteHigher rates for debt ridden producers and financing new projects high rates seems to squeeze producers? I won't type this SWN ticker again, just so it can be another idea ignored.
DeleteYou do know what that means, right CP? That's right, it (SWN) will outperform everything you own!
DeleteOne thing regarding Nat Gas - Wasn't one of the arguments for why it should be so low that it was a by product of the shale drilling and almost just discarded at any price? If production has dropped in that region then shouldn't nat gas production have dropped as well? You guys know how this shit works....it's really a bunch of bull so it all comes down to what can drive sentiment.
ReplyDeleteIt would be ironic if the best thing that could have happened to nat gas prices was a crash in oil prices.
DeleteHave you researched Utica shale? Prolific, is the word I keep reading.
DeleteA lot of nat gas is produced as a by-product of oil production and that has helped push nat gas prices down so far.
DeleteBut supporting nat gas, is the fact that, other thann fracing which is expensive, no-one has been drilling for dry natural gas for probably 3 years now. People are still drilling for wet gas as the other products have made this viable, but I would not expect to see a fast supply response to higher nat gas prices as I suspect the energy companies do not have a lot of production ready to bring on-stream.
Isn't the Utica pretty much dry natty?
DeleteCP - Yeah I have definitely read a ton of reports about the supply coming out of those shale formations...that's all that has been talked about for years. There could be a more significant slowdown in production if oil prices stay lower as it makes it less economical for these companies to just keep drilling. Who knows? I think the sentiment could change with exports coming online, with more coal plants shutting down, and more demand from industrial usage. It's all about sentiment. Doesn't mean we see Nat Gas at $16 again, but $5-6 seems likely given the prices in international markets that we will be exporting to.
DeleteOil is up big today, I guess that's why natty looks soft. Iran and Iraq are in que to increase oil production? Talk of exporting natty (don't count on that) and piping natty to Mexico (is that gonna happen or more delay?)
DeleteIf I could just poke a pipe in the ground for almost free without racking up debt and blow everyone away, I'd do it. Find a stock that can do that and I bet you've got a winner.
Demand for natty is picking up, especially if prices don't spike. This process could take a while. Pick the best geological formation.
TDW - Obviously selling this one at $26.75 for a small gain was premature.
ReplyDeleteAEIS - I think solar players are offing this one on the decision to exit from inverter market. $31 price objective. Dunno how much more this can be pushed down but this might be about it? The insider exit keeps me on the sidelines anticipating a lower entry.
I'm still looking at how I can go back in time and not have sold TASR at $30. Thankfully everyone I know is still in it with 30% gains to boot.
DeleteBXE - LOL, taking it's daily bowl movement.
ReplyDelete(a) RYTPX (Rydex 2x Inverse SPX) off the table with a nice +0.7% gain at the morning window.
ReplyDelete(b) EXAS (Exact Sciences) still struggling to regain 24. A pullback today is not unexpected given yesterday's +10% move- short-term traders are taking profits. IMO, Cologuard is a game-changer, 'a big deal.' The company is no longer in the 'pre-revenue' stage-> it is booking income and clearly ramping up. In addition, as of March 31 over 33% of the float was 'short.' Contrary to popular opinion, a large short presence is highly bullish: in this case there are 30m shares that will need to be 'covered' at some point. Both the NEJM and the FDA (not to mention several national insurers) consider Cologuard to be highly superior to FIT for early detection of colon cancer. Only 11,000 Cologuard kits have been sold thus far.
The markets continue to be 'complicated:'
(a) Gold is up $6 (not surprising given a -0.4% drop in the $USD). However, miners are selling off: GDX -1%, Goldcorp -1.2%, SLW (Silver Wheaton) -2.24%.
(b) US indexes are in retreat (DJIA -121 points), yet both the long bond (TLT -0.7&) and utilities (XLU -2.25%) are selling off harder.
(c) EEM (Emerging Markets) -1%. No surprise given last night's -4% move in the Shanghai Composite and -368-point drop in the Hang Seng. On the other hand, Brazil's Ibovespa is up +1.3% (note that both VALE [up another +8% today to 8.68!] and PBR [Petrobras, +5%] continue to fly).
(d) USO (crude) is higher, with OIH (Oil Services) up +0.6%. XLE (Energy) however is down by the same percentage.
Basically, apart from oil- and basic materials- producers/exporters, nothing's working today.
Once you figure out how to travel back in time, let me know and I'll reverse my earlier decisions to sell PBR and VALE.
ReplyDeleteUgh those are worse! I "only" missed out on another 15%.
DeleteI know it has no significance, but when Oil bottomed out in 1999 it double bottomed almost exactly 3 years later. Nat Gas bottomed out almost exactly 3 years ago. Eh we'll see. Going for a walk. Beats walking in place in the market.
ReplyDeleteThe rallies off the initial lows were:
DeleteDec 1998/99 Oil: +247%
2012 Nat Gas: 242%
Oil, after "double bottoming" in 2001, oil made higher highs just 14-15 months later. When it double bottomed it collapsed into the double bottom.
All of this similarities kind of back up what I'm feeling as far as Nat Gas goes. The key will be legging into this trade on down days.
I made a trade today, I'll tell you later if it worked.
ReplyDeleteha good one! then you can go on tv and tell all!
DeleteIt would be the only trade that worked for me if it does, so TV is highly unlikely.
DeleteHey folks! Just checking in. I hope you are all doing well! Judging by the comments above, everyone here is smart enough to do short-term trading rather taking long-term, "opinion-based" positions...
ReplyDeleteMy Buddhist nature keeps me out of short-term trading, and recently, I've been practicing staying away from opinions as well. But I did keep one eye on the market, to see if perhaps something clear would arise, some clear call to action (like the need to go replenish the food supply at home, which really doesn't depend on one's opinions and judgments). I am seeing something like that now and I was wondering what you folks think about it. Take a look at this chart of 10-year inflation expectations (red line):
http://research.stlouisfed.org/fred2/graph/?graph_id=87988&category_id=0
Doesn't it look like we are past the bottom of inflation? SLV and GLD bottomed around the end of 2014, just as expected inflation hit its low. With inflation expectations on the rise now, wouldn't it make sense that we should soon see a noticeable move up in GLD and SLV?
Also, I read somewhere that stocks do very poorly when economy just shifts from disinflation to inflation. Maybe that's because investors are expecting higher interest rates and thus higher discounting rates on their dividend streams. In any case, rising inflation chart should make any long-term equity investors very cautious... And check out this interesting chart of cumulative money flow into equity funds, which have turned negative 3 months ago:
http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/04/InflowsVersusPrice.jpg
A change is in the air, wouldn't you say?
Hey David - Great to hear from you. Hope alls well.
DeleteAll of this stuff is too complicated for me. It's hard enough knowing if the CEO of the company I'm trading is selling me a shit sandwich, let alone the implications of inflation on gold, silver, etc. I personally know that I stopped reading Zero Hedge in 2009 and it allowed me to maintain an open mind about any possibilities. They too are selling something.
Hey bro!
DeleteMy two cents: A change has been in the air a long time. Just ask John Hussman.
David,
DeleteMost of the commentary I have read shows that stocks do well when interest rates start to rise due to an improving economy as this shows that the economic growth is real. When rates rise later in an economic cycle to prevent overheating, it is bad as it often leads to a recession.
Re precious metals, a number of the contrarian type investors seem to be looking at an moving into these markets, so it could be we are near or have seen the bottom in precious metal stocks.
David,
DeleteMost of the commentary I have read shows that stocks do well when interest rates start to rise due to an improving economy as this shows that the economic growth is real. When rates rise later in an economic cycle to prevent overheating, it is bad as it often leads to a recession.
Re precious metals, a number of the contrarian type investors seem to be looking at an moving into these markets, so it could be we are near or have seen the bottom in precious metal stocks.
Freddy Mac has paid out almost $2B since the arranged fiasco, the US military budget is 250x that amount and yet any bozo can still land his rotocopter unfettered onto the white house lawn. Wonder how many US congressmen made insane amounts of money betting on HII while promising and threatening cutbacks on military spending?
ReplyDeleteThis is a report from the Canadian National Energy Board which says you need $6.00 gas to really get serious dry nat gas drilling going - would be a big move up from here:
ReplyDeletehttps://www.neb-one.gc.ca/nrg/sttstc/ntrlgs/rprt/archive/ntrlgsdlvrblty20122014/ntrlgsdlvrblty20122014-eng.html
Right, are these the guys I bought BXE from?
DeleteYINN - Holy crap, just noticed that.
ReplyDeleteI don't think the valuation/store is valid giving the small amount of SHAK's open.
ReplyDeleteROSE the Rosetta Stone of oil.
DeleteHello David, trust you are well..
http://www.bnn.ca/Video/player.aspx?vid=607184
ReplyDeleteNat down a lot on a Jeffries report. Almost back to my purchase price. I don't know - rates are up from Q1 and CEO calls pretty positive, so I think still worth holding and probably a buying opp. Contango is part of the story but also a lot due to changing shipping patters due to North American importing less and Iran oil coming on stream and requiring shipment.
ReplyDelete"Crude Oil Tanker Market Supported by Crude Oversupply. We are maintaining our
1Q15 but reducing our remaining 2015 EPS estimates for the crude oil tanker companies
with VLCC and Suezmax exposure as we expect the contango in the Brent curve to flatten
in the coming months. We are increasing our 1Q15 and remaining 2015 EPS estimates for
the crude oil tanker companies with Aframax exposure as we expect Aframax spot charter
rates to remain strong in the coming months."
ASC hopefully making up for it.
DeleteStock bombs all over the place, yum.
With 30 minutes to go, global indexes are struggling.
ReplyDelete(a) FXI (China 'H' shares) -3.6%, CAF (China 'A' shares) -5%.
(b) EWG (Germany) -2% following a -2.51% overnight drop in the DAX. VGK (Europe) -1.62%.
(c) GDX (miners) -1%, off the day's lows. The problem with buying miners here? I'm expecting a bounce in the $USD.
(d) EEM (Emerging Markets) barely off intraday lows @ 42.9x. I'm tempted to play a bounce in Asia, but China/HK closed near their respective lows last night and I'm not convinced buyers step up tonight.
(e) TLT (Treasurys) well off its lows and now just -0.2% @ 122.5x. I'm starting to believe that Treasurys and stocks will begin trading in the same direction. Both asset classes are trading as if an interest rate hike is immiment. Higher rates generally translate into lower prices (at least initially) for both stocks and bonds.
(f) OIH (Oil Services) + XLE (Energy) at their respective intraday lows despite a +2.5% spike in oil? I'm not smart enough to predict which of the two is the stronger 'tell.'
All said and done, I spot no low-risk entries. With the exception of starter positions in EXAS and UGAZ (both with intermediate-to-long term horizons, and both of which are likely to trade independently of the broad market), staying in cash overnight.
This is why I really have no desire to be long energy stuff:
ReplyDeletehttp://static5.businessinsider.com/image/55158df26bb3f7a96c8e52f1-1199-901/rigs-1.png
I still think we just came through a massive bubble. Probably wrong because I don't invest in this sector and don't really know it that well but from a sentiment standpoint (peak oil etc) seems like it should take longer to work off those excesses.
Well, just for the heck of it, I picked up some in-the-money September 2016 SLV calls and SPY puts today. I'll come back in a year and see what happens. :)
ReplyDeleteGAS - Wow, wonder what prompted that collapse. Maybe a bearish report from a Canadian energy board?
ReplyDeleteCool read:
ReplyDeletehttp://myemail.constantcontact.com/MarketPsych-Report--Our-Age-of-Speculative-Bubbles---Making-Sense-of-Chinese-and-Biotech-Stocks.html?soid=1102018840540&aid=6Xf9ajPv_Jw
EYES - Well, someone must've said "F-this I'm buying a ton of this one."
ReplyDeleteStick save and a beauty. Still hoping for some news before earnings to book a nice gain.
DeleteLiterally the same EXACT charts for Nat Gas and YNDX...Nat Gas at same spot technically that YNDX was at around $15 at end of March:
ReplyDeleteYNDX:
http://charts.stocktwits.com/production/original_36416246.jpg?1430865282
NatGas:
http://charts.stocktwits.com/production/original_36416225.jpg?1430865251
Exports to Mexico are up what seems to me like a good amount. Somewhere I read some time ago not to export natty exports to Mexico will offset production oversupply that exports weren't going to be as great as anticipated.
DeleteAMAT - Possibly overdone, based on what I think I know (admittedly ancient info) I view the backout of the TEL merger as positive, longer term.
ReplyDeleteJust checking in. Still not trading any more. Still holding a port of losers. Biggest disappointment is NSPH. Nanosphere. They just can't get any traction although sales are growing quite a lot. They have life saving technology particularly for sepsis. I still think they will grow, although the take up in the hospital industry is slow. NSPH recently split their stock up quite a bit to satisfy NASDAQ.
ReplyDeleteThanks for update on that, I've been meaning to look at it again.
DeleteSCO - Nice set of batman ears. Not sure how much further downside might be but probably worth watching.
ReplyDeleteSCON - Wonder if Blackrock is still averaging down?
ReplyDeleteGMO - Classic bull flag, LOL, what are the chances?
ReplyDeleteCRC - Here's one to watch, my broker has a $15 target on it. No, they don't cover BXE unfortunately.
ReplyDeleteHere's a cool looking tracker jacker:
ReplyDeletehttp://gpsworld.com/jammer-hunting-with-a-uav/
CLMT - This company reports in the morning. Check out that dividend, wow. $27 target.
ReplyDeleteWalter Energy (WLT) issues a going concern statement. Maybe this is good news that supply will come off as companies go under, or maybe it is more a statement on the poor demand levels out there for coal.
ReplyDeletehttp://seekingalpha.com/news/2490976-walter-energy-says-substantial-doubt-on-continuing-as-going-concern
40% short float, how much do shorts get if it stops trading?
DeleteWatching some of the Warren Buffett interviews from CNBC Monday - just a logical guy:
ReplyDelete"If these interest rates were to continue for 10 years, stocks would be extremely cheap now," the chairman and CEO of Berkshire Hathaway said Monday on CNBC's "Squawk Box," two days after Berkshire's annual shareholder meeting.
If rates normalize, stocks would be on the high side on a valuation basis, he said.
And:
Stocks are cheaper than bonds, which are "very overvalued," he said.
http://www.cnbc.com/id/102644439
(a) The Shanghai Composite attempted to bounce overnight, but closed down -1.62%. A muted version of the same pattern occurred in Hong Kong.
ReplyDelete(b) TLT (Treasurys) are bidding lower yet again this morning, off -0.7% pre-market.
(c) In general, however, global indexes are holding fast.
(d) Spot gold displaying its usual antics this morning, head-faking a plunge down at the London open only to recover at mid-session.
I think volatility may pick up today, and I'm leaning bullish.
PTCT - $91 target on this one.
ReplyDeleteReopening VALE @ 8.84.
ReplyDeleteENPH flipped just now 10.49/10.78
ReplyDeleteNice job! :)
DeleteI took a little of the EYES off at $12.3...well actually it was just for the furniture account and the in-laws account. They both had $12.00 basis so just taking gains where I can get em. Prevents me from holding TASR but has kept me in the green this year in what has been a pretty tough market. Just trying to stay alive in the event we get a decent drop so I can pick up stuff cheaper.
ReplyDeleteI bought a little CHK at $15.36 but I couldn't get completely filled and of course they ran it. So I have like a 2.5% position.
ReplyDeleteAll the Canadian Energy stocks including BXE getting hit this morning as Alberta elected a left-wing NDP government - it's like Texas voted in the Democrats.
ReplyDeleteIt was the situation where 2 right wing parties split 53% of the vote, and the NDP got all the left wing votes, about 40% and ended up winning the election. The leader of the party is talking about reviewing energy royalties and carbon footprint, etc. which is why people are concerned.
We'll see. I think they'll be smart enough to realize how much of the economy and jobs are dependent on energy and not do much.
That's funny considering Hilary Clinton traveled her entourage to Europe in previous years championing the US oil and gas industry vs burning dirty coal.
DeleteThere ya go. BXE is guaranteed to participate on cue, people love selling it. If management never buys any, it's a good indicator they don't trust their own cooking.
DeleteSLW @ 19.55.
ReplyDeleteGG @ 18.46.
PCRX - Wonder what prompted insiders to lighten up?
ReplyDeleteI've been watching $61 to $63 for the past week. I'd consider a position there.
DeleteAdded more CHK at $15.38. Keeping positions small in general though.
ReplyDeletePlan to reopen RYWVX (Rydex 2x Emerging Markets) @ the 1030 window.
ReplyDeleteA -120 point in the DJIA + a -1% drop in the long bond.
Higher gold/silver prices + a pullback in miners.
EEM off -0.35% + EWZ (Brazil) +1%.
None of the above exhibiting conventional interrelationships. As mentioned earlier, however, I'm leaning bullish today.
SWN - I'm not doing too badly on my new position from yesterday, so far near flat.
ReplyDeleteCLMT - Can this company maintain that dividend? I'd buy it if I believed the income supports it. I like the company, good line of products.
Adding a position in PBR (Petrobras) @ 10.39. Brazil 'wants' to break out.
ReplyDeleteRevenge Porn, lol, @ another clever use for smart phones.
ReplyDeleteSold CHK at $15.44 avg. Just going to stick with UGAZ on this nat gas play.
ReplyDeleteAdding GDX @ 19.83.
ReplyDeleteLong BIS at $34.3. Not the greatest entry and not sure if this is going to be the big drop in biotechs or if it comes in Sept / Oct, but I am playing for a retest of the $330 level in IBB
ReplyDeleteI think there's a decent chance we see an epic short squeeze in nat gas. Added some today between $2.37 and $2.46. I'm going to have a hard time holding through tomorrow's report but it just feels like the right thing to do.
ReplyDeleteAdding to VALW @ 8.43.
ReplyDeleteAdding to PBR @ 9.97.
That was VALE, of course.
DeleteThe long bond. Unbelievable. TLT now off an additional -1.25% to post a -8% drop over the past 13 days. If it's a 'tell,' probably not good for either stocks or bonds in the short term.
ReplyDeleteAstounding!
DeleteThis may be part of what's going on with offset by BOJ and ECB.
The Federal Reserve is scaling back, terminating purchases of government bonds and mortgage backed securities (“MBS”), which at their peak provided more than $1 trillion a year in new funds to markets. While new purchases have ceased, the Fed does not plan to sell its portfolio of around $4 trillion of securities. It will continue to reinvest principal payments from its holdings of MBS and roll over maturing Treasury bonds.
Bought back into GILD at $102.5 and sold off BIS. Tough to ignore the value in GILD.
ReplyDeleteIt's unclear which is correct, ISIL or ISIS and whether or not it's an organization backed by Iran, Saudi Arabia, or the US. Sure wish someone who understood would explain clearly in plain words.
ReplyDeleteBXE - Down even more that that other pump and dump stock, SVM.
ReplyDeleteI took my lump on UGAZ (sold at $2.38) and sold GILD at $102.2. Not really interested in engaging in this market's activities right now.
ReplyDeleteIs there anyone out there calling for a crash in biotechs within a week? Trying to gauge what sentiment is.
ReplyDeleteThe DJIA (-155 points), SPX, and NDQ all off -0.8% in late trading. GDX (miners) + EEM (Emerging Markets) at intraday lows. The long bond now off -1.7%.
ReplyDeleteAssuming no marked changes heading into the close, I plan to add a second tranche of RYWVX (Rydex 2x Emerging Markets) + positions in RYPMX (Rydex Precious Metals) and RYGBX (Rydex 1.2x Long-dated Treasurys) end of day. All of the above appear headed lower in the short term. The trades are a bet that none of the declines will unfold in a straight line. It's a high-risk environment, and I suggest sizing trades accordingly.
pretty risky market right now but in my opinion definitely a good thing yellen is trying to scare people because that won’t cause a crash in any single sector. people know that game all too well.
Deletecontemplating legging into FCAU, GILD, MET, BAC, GM, etc...all of the positions I had earlier at higher prices.
When the FED constantly threatens higher rates, they should follow through as opposed to jawboning people out of their positions on behalf of their future employers.
DeleteENPH looks like it's going to 9.30ish if the last 2 reports are any guide.
ReplyDeleteI'd totally forgotten they had that at $16.50, guess they got it wrong, eh? The analist might be a alt-energy groupie or something?
Delete"We are downgrading ENPH from Neutral to Underperform and lowering our PO from $16.50 to $10.50. We have structural concerns about ENPH's ability to grow & sustain margins given customer focus on cost & supplier diversity. Our $10.50 PO is derived from the average of our DCF ($11) and CY16E earnings analysis ($10)"
Grabbed some GMCR at $96 after hours. I figure if it drops any further Coke will just buy them out. Huge short interest.
ReplyDeleteITB - Apparently, homes aren't too expensive.
ReplyDeleteWFM - Want some, it's down on earnings.
ReplyDeleteI see some hammers, VA is one. Looks pretty close to the IPO here, maybe goes lower?
ReplyDeleteCrammer wiped out his pee pee and wiseled on VA the other day. Said buy LUV.
DeleteLooks like I sold VA at 31.70. Christ that was lucky.
DeleteOh really, molybdenum. I guess this might mean stainless steel.
ReplyDeleteLNG transport: "The expense of freezing gas for liquefaction to minus 260 degrees Fahrenheit and shipping it across the Atlantic or Pacific in molybdenum-hulled vessels is enough to maintain a big cost advantage for US manufacturers. "
One of my buddies who used to work at ENPH has been buying every .50 since 13ish.
ReplyDeleteHope he has deep pockets!
DeleteTSN - KO should buy this one instead of GMCR, Americans can do without latte.
ReplyDelete