re CAKE and FIVE, I'd say too risky for a 10 year hold. A lot can change in the restaurant and food fashion over 10 years. Look at Aeropostale as an example. WMT has food and staples and can mass carry any product, so can adjust with the market better.
Jeff Saut looking for a positive outcome from the Fed meeting, or if not, an extended bottoming process.
This week the verdict of the equity markets will be determined by the Federal Reserve and its mid-week decision on interest rates. If last week’s rally is to be sustained, it will be important to see the stock market’s response to the Fed’s statement, no matter what the Fed’s decision. If the statement is not to raise rates, the market should rally. If they do raise rates, the market should shake it off and move higher. If not, then the verdict of the market will be for a longer bottoming process, confounding the managers of “someone else’s money.”
FDX looks interesting at 13.5 times next years earnings. Have a defendable, hard to replicate, business model and grows with e-commerce growth. Hard to see why it trades at less than a market multiple.
TOF asked, “Curious to know if you guys had to pick 5 stocks to buy and hold for the next 10 years which stocks those would be.”
Upon reflection I have no idea which 5 stocks will be best for that horizon. Here is what I would consider, pick 20 stocks you’re interested over that time horizon within different sectors. I would then rank them on a criterion of your choice ie weekly, monthly or quarterly. Based on that criterion I would seek to be invested in the top 5. When one of the 5 falls out of the top 10 I would replace it with one in the top 5.
Energy: CVX CBI SLB/HAL KMI/SE Banks: BAC USB STT Bio: BIIB GILD and I like your XON Commodity: ZINC TGB/FCX FNV
I doubt most will appeal to you as I prefer large cap and I know you like small cap. The main thing is the market is basically in a downtrend, as you know, so we fight against the tide. It looks like we rally into decision on Thursaday. Health: MRK BDX CVS
Bought HMY, PGH, SFY, XCO. also bought BCEI and BTE and CRK. i might buy some more. i remember in 2009 I just threw out orders on like 10 stocks in the S&P 500 that were under $3. I tripled my money in a month. Not sure the same will happen here but worth a shot
I sold both of these now at $152.6 and $12.3. Odds favor a continuation of this rally given I'm willing to bet everyone not believing it continues tomorrow.
I ended up closing out of all of my positions...all of the 1% positions after analyzing the whole bottoming pattern of oil closer. Typically bottoms in long bear markets occur as volume dwindles and there's nothing left but total disinterest. On the recent bottom, /CL had its largest volume ever. This tells me that the odds are we may have hit the panic lows but that there's even more downside coming. As such I would prefer to just be out of the stocks altogether and wait for what I've always waited for in other markets >> if i want to catch the bottom, then wait for volume to evaporate and positive divergences to develop; if i prefer waiting for a new uptrend to emerge, then waiting for a break out above the 200 DMA and a retest of it as it comes above it.
On the flip side, /ES futures hit a 75 RSI reading on the hourly chart, so I'm willing to try a little short here. Long SPXS at $19.87. I still think odds favor a bear market given what I think are very significant headwinds from China, Russia, and Brazil, the world's growth engines on the way up and now headwinds on the way down.
This market is set up to roast a ton of shorts and get a lot of people to get long at higher prices.
I'm the perfect example...I sold all of my lotto plays in oil / energy today because I didn't like what I saw in terms of volume structure on oil. Everything closed weak. So what happens? Oil gaps up over 1% after hours and will leave people like me chasing it higher tomorrow.
This is a fairly well defined risk/reward trade in my opinion (move below recent lows is a stop out point). I'm playing for a drop heading into the Fed meeting obviously.
Fdx - I agree looks cheap. I'd rather wait for a downturn where earnings drop 50% and people freak out though. Looks like they were yet another company that raised debt to buy back stock as their actual earnings haven't improved much since 2007
MIssed on earnings and lowered estimated slight for 2016, so now trading at almost 14 times 2016 earnings.
I kind of see FDX like a railway - dependent on GDP growth, but also also with some oligarchic pricing power as only 2 national shippers and no new ones coming, but competition from small guys (like trucks compete for rail business).
UNP pullback has it back to trading at 14 time fwd earnings. Probably not a bad place to look at as well, assuming this is just a correction and the bull market continues. If we do get a bear, maybe we get a 2009 type buying opportunity, but I doubt it.
Funny, how the media makes every Fed meeting "the most important one in a decade". I'm pretty sure that's the description for every one for the last 5 years and will be again for the next one.
Really annoyed about selling out of my oil longs yesterday. Position sizes were so small but I still chickened out. All of them are up 5 to 20% today.
I bought some UGAZ at $8.33 and bought EGO at 2.83 and HMY at $0.819. I'm thinking some of the gold plays could bounce more heading into the Fed meeting tomorrow. But longer term I think the sector is worth buying into.
Ha, yeah these guys are working on making wire for winding power transformers that can protect from power surges. The transfer function of the transformer changes to crowbar the surge as temperature increases. It's not clear to me how the transformer is cooled, during normal conditions, "active" or "passive". "Passive" would be the preference b/c there's should be none or tiny amount of energy consumed for controlling temperature.
The focus seems to be manufacturing the wire, which seems to be a challenge. I'm not sure the focus shouldn't be on implementing the wire, still a fail if the wire works yet can't be used. Small samples work as intended, yet for instance a completed transformer that isn't near 90% efficient probably isn''t worth much.
I think they do raise rates tomorrow, but looking at gold today, it's saying lower rates for longer and a lower US$ with higher risks of inflation down the road.
I'm golfing tomorrow at 3:00. Bad planning as I will have to leave my house shortly after 2:00. But realistically, I find the markets move so fast after an event like the Fed announcement, I probably wouldn't trade anything unless we got another flash crash type situation.
I'm thinking we're looking at a bull trap. Interesting though all the bearishness ahead of the FED show then short covering b/c they've been trained the FED isn't their friend but now I've got this idea the FED is no longer the friend of bulls
What are you thinking of doing with these stocks? If you are going to buy and put away in a retirement account and forget about them, that's one thing. If you are looking for stocks to buy and hold longer term, but still will monitor and potentially sell at full value, that is another.
My self-imposed trading ban will be lifted today with the FOMC announcement. Yesterday's price action in EEM (emerging markets), and to a lesser extent in GDX (miners) + OIH (oils) +XLE (energy) offers potential set-ups today or Friday. I exited all Emerging Markets positions (as well as all other positions) last Friday to avoid unnecessary risk. Yesterday's 'gap up' in EEM on high volume offers valuable insight.
Now for the qualifiers:
(a) Price action on the ‘day before’ FOMC is notoriously unreliable. One reason to wait for today’s reaction to FOMC (which is itself subject to one or more false moves). (b) It’s still a bear market. The SPX hit a 10-day high yesterday, which excited traders. When traders get excited, it’s time to slow down. (c) Ideally, I try to pinpoint where yesterday’s chasers set their sell-stops, then scale in as they begin to stop out. The strategy is to sit tight while others are buying, then begin buying as they’re stopping out. Given yesterday’s price levels, I’m targeting 33-and-change for an entry into EEM. (d) Two additional $SKEW prints in the 140+ range (September 14 and September 16) are a concern. $SKEW normally signals tail risk BEFORE it happens. In this case, we have three prints within two weeks FOLLOWING the August 24 crash. I’m not sure what that means. One possible outcome is to see markets spike HIGHER rather than lower. On the other hand, $SKEW has been ‘spot on’ since early 2014.
Damn. No rate increase, so we will have to talk about it for at least another month. Don't think it really affects the market, unless we see a big ramp up on this news, which would be a negative reaction I think
I really thought they would raise too. Maybe us guys who are watching the market see things differently than the Economist watching the economy. Oh well, we just have to accept it and move forward and try and make money regardless
My guess is its unwise to chase here. I suspect we run a little higher and top out for several days, then we drop down and test the lows from August 24th over the coming 2 weeks or so in early October.
I wasn't sure what the Fed would do today, but I was pretty sure that VIX would drop after the Fed's announcement, since mystery would be out of the picture. Still holding all the VXX puts I purchased during the recent market collapse. Just set a sell limit order on those that I bought first, when VXX was at $22 (purchased the next bunch when VXX was at $26, and the final bunch when VXX was at $30).
Also it is nice to see GDX bouncing today. I was quite surprised to see the mid-August bounce fail, as it failed at the LOWEST level of commercial hedging for any rally. Maybe it was just the unexpected Chinese news that derailed that bounce. Anyway, after that bounce failed, I was expecting GDX to make new lows and keep going down, and I already considered all the calls I purchased as lost money (yet another example of how one loses money when buying options, unless those are long-term VXX puts purchased during a market panic). But today's bounce brings in the new possibility of a double bottom at $13 -- keeping my fingers crossed! :)
(a) The Fed leaves rates unchanged ‘amid worries about low inflation and a flare-up in financial volatility at home and abroad.’ (b) Traders appear to view the decision positively. Although ‘no change’ was widely expected, the fact that Fed policy is now officially an instrument for containing volatility is a plus for capital markets. (c) EEM spiked as much as +2.3% on the news. The ETF has now backed off to print a +0.5% gain. (d) TLT (the long bond) is up +0.8%. (e) GDX (miners) are up +3.3%. Not surprising given the plunge in $USD following the announcement. (f) The DJIA up as much as +136 points.
1230 pm pst:
(a) EEM has now retraced to +0.41%. I could make a case for opening here, as I would be buying while others are selling. However, I prefer a lower-risk entry. Still too much ‘excitement’ (emotion) at play. (b) DJIA +1 point.
1236 pm pst:
(a) DJIA -11 points.
My plan hasn’t changed. I’ll probably get a better ‘read’ on sentiment after hours, but for now I sense too much panic buying to risk my own capital.
With the Fed on hold for the next 6 weeks, no panic can occur, and so there is still a lot of money to be made by shorting VXX, especially because VIX is still very high by historical norms...
Based on past experience, here's my take on EEM for the next 24 hours.
(a) Traders who chased today's rally have a serious case of buyer's remorse. (b) They will be anxiously following overnight action in Asia, hoping for the slightest sign of a rebound on Friday. (c) In my humble opinion, NOT HAPPENING! (d) They will toss and turn all night. (e) On Friday, they will boot up to see bids gap down below their worst fears. In response, they will lower sell stops. (f) Brokers will begin running those stops in the pre-market session. I plan to start scaling in at that point.
Probably just a dream. In any case, I'll be sleeping soundly tonight!
Glad I went golfing today - doesn't seem like I missed much! No rate hike is disappointing for my overweight financials position, but not big moves.
Next couple of weeks will be interesting. I figure a good number of portfolio managers and pensions funds and traders, who were expecting a rate hike, will now be changing their portfolios to reflect their new perspective on the world, so could cause some more volatility.
Personally, I don't think I'll be changing much, but we'll see what happens.
TD reduced their base metals forecasts going forward and re-calced valuation on the base miners. For TGB, they have a hold rating and target of $0.85 (all numbers here are CDN$)
Losses are $0.14 for 2015, $0.11 for 2016 and profit of $0.01 in 2017. NAV using a 10% discount rates drops to $1.58
This is based on Copper prices of $2.57 in 2015, $2.50 in 2016, ramping up to $3.00 in 2019 and long term prices of $3.10.
So, to buy a miner like this, in my way of thinking, you have to see metals prices being higher than this forecast. Previous price forecasts were about 20% higher and at those prices, EPS was projected at $0.23 in 2017, so you can see the leverage.
There are more details in the report if you want to see it.
Hard to read too much into this short term action I think.
For the next while, you will have sellers because global growth is slower and interest rates are rising as quickly as some thought. So probably sellers in financials, maybe commodities unless the US$ drops a lot, industrials, etc.. But you will have buyers in companies that benefit from lower rates, maybe home builders, car companies, consumer discretionary, etc.
Maybe Canada doesn't want to fall into depression along with Texas, Canada as a country has more power than Tx., being a state?
Not sure where China will be getting their energy and minerals from, perhaps Mongolia and/or Australia? Right now they claim they don't need anything but longer-term they'll use up those piles and need more.
SAFT - Someone likes this one but seems rather pricey for insurance trading well over book. Dividend is exceptional, on the surface. No debt but earnings don't seem to support dividend unless there's some improvement in income.
I really thought they would raise too. Maybe us guys who are watching the market see things differently than the Economist watching the economy. Oh well, we just have to accept it and move forward and try and make money regardless
This is actually the first time I've looked at the market today. No plans on wasting my time in this market right now and I would prefer to just preserve capital. Been scheming up ways to make some additional income streams.
Will come back when things settle down which could take months. Good luck fellas.
ema13 is 2021, exactly where market topped this week. Think of the ecological benefits of a declining global economy, the climate change crowd must be celebrating.
BXE- Thanks for the link CP. I guess the thinking is they would avoid BK if the price is right....although I don't think BK was ever really in the cards.
We should load up on the stock and submit our non-binding LOI don't you think?
"prospective purchasers are encouraged to present their proposals for acquisition via a non-binding Letter of Intent as promptly as possible as Bellatrix may choose to accept an offer and proceed to negotiate the Purchase and Sale at any time, at its sole discretion without any further notice being given whatsoever."
The goal was to open positions where buyers who chased the past two days were getting stopped out (the ultimate buy point is someone else's sell stop). I opened a few positions in Emerging Markets, oils, and even GoPro! I can't predict what will happen next week, but should I get stopped out myself, buying when others are selling usually gives me a pretty good 'buffer.'
KRE - Notice the reversal at resistance. Now there's a gap down to fill, wonder which way this goes next week? Honestly I wouldn't mind lower prices b/c I'm not long but....... What IF?
A lot of the smart value guys like the regional banks, but they've been positive on them for a few years now and they've only done OK, but not great. I think they are good long term buys (I own KTHN), but the lift-off for these probably got pushed out this week by Yellen.
Remember in the 70's ATT promised us Dick Tracy wrist watches? There was also talk about nuclear powered electric family cars, wouldn't that be something?
I've been busy researching some rental properties where I went to school in Pennsylvania. I have a friend that owns 5 properties and he's been giving me some great advice on what to consider. These properties are selling for $120-$150k and are renting out for $1,400 to $1,700 a month. He said he has never had a vacancy in the 15 years he has owned his properties because of the constant stream of students coming in. And tuition is over $60k per year so the wealthy parents are usually backing the leases. A $120k place will cost about $37 to $40k up front including renovation and you can clear about $8k per year in net rental income after all expenses. Essentially 20% initial return which goes up over time, which I really don't see how I can reliably generate those returns in the market given what I think could be a horrible trading environment for a while (ie. lots of ups and downs).
I've been talking with my friend about buying several. I'll probably be looking to fly out there next month.
BB - Regarding what Yellen said, my initial reaction was they don't envision raising rates for a long time. We very well could be in a scenario similar to what Japan had to deal with, albeit maybe for only 15 years, not 25 and ongoing that they have. In that scenario, the banks/insurers might not trading at higher multiples for a long long time.
That is a great return. Students can be a pain as tenants, but they areusually good for high rates of return. The one thing I've seen hurt student housing is overbuilding by the school or local developers, but other thN that, it is a very sure customer base.
Re the financials, if we are in a Japan type scenario, you are right about the valuations. My being diversified across industries industries will hopefully help, but also, all the ones i own are trading ar sub 10 p/e's, so i feel good that he value of the company is increasing by more than 10% a year, so even if low valuatons persist, as long as they don't get worse, my financial stocks should go up at least 10% a year, which is not great, but acceptable.
Closed SLW after hours @ 11.67. http://finance.yahoo.com/news/silver-wheaton-announces-initiation-normal-211000851.html
ReplyDeleteAlways nice for an unexpected gift.
DeleteI agree with BB. Raise rates 25 basis points. It's Fing ridiculous.
ReplyDeleteTOF,
ReplyDeletere CAKE and FIVE, I'd say too risky for a 10 year hold. A lot can change in the restaurant and food fashion over 10 years. Look at Aeropostale as an example. WMT has food and staples and can mass carry any product, so can adjust with the market better.
I actually don't know FIVE well enough but they tend to only sell really cheap stuff that I'm assuming isn't fashionable.
DeleteCAKE is more of a invest in what you know business and I know this one well since my wife's entire family raves about it
Simons charged 5 and 44
ReplyDeletehttp://www.ritholtz.com/blog/2015/09/jim-simons-the-mathematician-who-cracked-wall-street/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29
not too much on investing here
Nice payday if you can get it,
DeleteSome fairly heavy insider selling for home builders lately.
ReplyDeleteJeff Saut looking for a positive outcome from the Fed meeting, or if not, an extended bottoming process.
ReplyDeleteThis week the verdict of the equity markets will be determined by the Federal Reserve and its mid-week decision on interest rates. If last week’s rally is to be sustained, it will be important to see the stock market’s response to the Fed’s statement, no matter what the Fed’s decision. If the statement is not to raise rates, the market should rally. If they do raise rates, the market should shake it off and move higher. If not, then the verdict of the market will be for a longer bottoming process, confounding the managers of “someone else’s money.”
FCAU Europe August sales up an above market 13.9%, stock up almost 3% in Europe.
ReplyDeleteUnion negotiations continuing in the US. WIll be very interesting to see what the results of these are.
I got back in ugaz at 8.92 this morning but they didn't give me much.
ReplyDeleteGoing to sell uvxy and russ for small losses at the open
Silver - Not far from my $13 handle target. The geometric target is $12.25 or so, I think.
ReplyDeleteENPH- This must be tricky to do but have always figured it was what's next.
ReplyDeletehttp://www.pv-magazine.com/news/details/beitrag/solarworld-and-enphase-to-develop-integrated-ac-modules_100021083/#axzz3lobuqQ00
So have we fully digested our quarterly taper tantrum?
ReplyDeleteI think we'll have problems if they don't raise.
DeleteHAL - Back over $37, all is well.....
ReplyDeleteAmericans bought cars this August. Sharp drop in auto production, though.
ReplyDeleteFDX looks interesting at 13.5 times next years earnings. Have a defendable, hard to replicate, business model and grows with e-commerce growth. Hard to see why it trades at less than a market multiple.
ReplyDeleteJust bought 1.5% positions in several energy and metals stocks trading under $1.
ReplyDeleteTOF asked, “Curious to know if you guys had to pick 5 stocks to buy and hold for the next 10 years which stocks those would be.”
ReplyDeleteUpon reflection I have no idea which 5 stocks will be best for that horizon. Here is what I would consider, pick 20 stocks you’re interested over that time horizon within different sectors. I would then rank them on a criterion of your choice ie weekly, monthly or quarterly. Based on that criterion I would seek to be invested in the top 5. When one of the 5 falls out of the top 10 I would replace it with one in the top 5.
Rinse repeat for 10 years.
FWIW
T3 - I was actually curious to know what stocks all of you guys like as a way to generate some ideas.
DeleteEnergy: CVX CBI SLB/HAL KMI/SE
DeleteBanks: BAC USB STT
Bio: BIIB GILD and I like your XON
Commodity: ZINC TGB/FCX FNV
I doubt most will appeal to you as I prefer large cap and I know you like small cap. The main thing is the market is basically in a downtrend, as you know, so we fight against the tide. It looks like we rally into decision on Thursaday.
Health: MRK BDX CVS
Core Logics - Austin property 42% above sustainable levels, DC metro 20% above.
ReplyDeleteBought HMY, PGH, SFY, XCO. also bought BCEI and BTE and CRK. i might buy some more. i remember in 2009 I just threw out orders on like 10 stocks in the S&P 500 that were under $3. I tripled my money in a month. Not sure the same will happen here but worth a shot
ReplyDeleteBought some PWE as well.
DeleteLong SPXS $20.17, stop $20
ReplyDeleteWow that was quick!
DeleteCG - Off, stopped going up so took gain.
ReplyDeleteI bought back into TA earlier today at $12.08 and AMGN just now at $152.1
ReplyDeleteI sold both of these now at $152.6 and $12.3. Odds favor a continuation of this rally given I'm willing to bet everyone not believing it continues tomorrow.
DeleteI may rebuy into them...
I ended up closing out of all of my positions...all of the 1% positions after analyzing the whole bottoming pattern of oil closer. Typically bottoms in long bear markets occur as volume dwindles and there's nothing left but total disinterest. On the recent bottom, /CL had its largest volume ever. This tells me that the odds are we may have hit the panic lows but that there's even more downside coming. As such I would prefer to just be out of the stocks altogether and wait for what I've always waited for in other markets >> if i want to catch the bottom, then wait for volume to evaporate and positive divergences to develop; if i prefer waiting for a new uptrend to emerge, then waiting for a break out above the 200 DMA and a retest of it as it comes above it.
ReplyDeleteOn the flip side, /ES futures hit a 75 RSI reading on the hourly chart, so I'm willing to try a little short here. Long SPXS at $19.87. I still think odds favor a bear market given what I think are very significant headwinds from China, Russia, and Brazil, the world's growth engines on the way up and now headwinds on the way down.
I will say though that this market will do well if the fed raises. TNX was up huge today and the bank stocks did very well. That's a good sign.
DeleteI took my SPXS off after ours at breakeven. Back to all cash. This rally probably continues from here.
DeleteSRS firmly above 200SMA, will the FED roast shorts or are they done doing that?
ReplyDeleteThis market is set up to roast a ton of shorts and get a lot of people to get long at higher prices.
DeleteI'm the perfect example...I sold all of my lotto plays in oil / energy today because I didn't like what I saw in terms of volume structure on oil. Everything closed weak. So what happens? Oil gaps up over 1% after hours and will leave people like me chasing it higher tomorrow.
So I chose to buy RSX after hours at $16.18, in an effort to not "miss" the run up. Will most likely be the wrong decision :)
DeleteREXX - Looks ready to blow
ReplyDeleteI grabbed some SDS after hours at $22.01/2.
ReplyDeleteThis is a fairly well defined risk/reward trade in my opinion (move below recent lows is a stop out point). I'm playing for a drop heading into the Fed meeting obviously.
DeleteI'm expecting a bull trap going into fed show..
DeleteObama doing a victory lap today on Twitter....almost a "Mission Accomplished" moment:
ReplyDeletehttps://twitter.com/POTUS
Interesting, but useless fact from Ryan Detrick - today, Sep 16 is the best day of the year on average for the last 20 years, down only 1 time
ReplyDeleteFdx - I agree looks cheap. I'd rather wait for a downturn where earnings drop 50% and people freak out though. Looks like they were yet another company that raised debt to buy back stock as their actual earnings haven't improved much since 2007
ReplyDeleteMIssed on earnings and lowered estimated slight for 2016, so now trading at almost 14 times 2016 earnings.
DeleteI kind of see FDX like a railway - dependent on GDP growth, but also also with some oligarchic pricing power as only 2 national shippers and no new ones coming, but competition from small guys (like trucks compete for rail business).
UNP pullback has it back to trading at 14 time fwd earnings. Probably not a bad place to look at as well, assuming this is just a correction and the bull market continues. If we do get a bear, maybe we get a 2009 type buying opportunity, but I doubt it.
Robot's short from Aug 20th, @2076
ReplyDeleteRecent note: "if the bulls take out the 1985-1988 resistance level, 2100 is on the way"
Funny, how the media makes every Fed meeting "the most important one in a decade". I'm pretty sure that's the description for every one for the last 5 years and will be again for the next one.
ReplyDeleteWonder if the JNK/ENPH deal will have any legs. Nothing else has. After JPM moved to a hold and a $10pt nothing has stuck.
ReplyDeleteObama doing a victory lap today on Twitter... Nothing about HPQ'a layoff, though?
ReplyDeleteGOOGL - Who is the GOOG of India, is it GOOGL?
ReplyDeleteyeah they dominate in India I believe. There's a public company in India called Just Dial as well.
Deletehttp://www.wsj.com/articles/ab-inbev-seeking-finance-for-sabmiller-deal-1410779802
ReplyDeleteI sold out of SDS pre market today. Sold RSX.
ReplyDeleteReally annoyed about selling out of my oil longs yesterday. Position sizes were so small but I still chickened out. All of them are up 5 to 20% today.
I bought some UGAZ at $8.33 and bought EGO at 2.83 and HMY at $0.819. I'm thinking some of the gold plays could bounce more heading into the Fed meeting tomorrow. But longer term I think the sector is worth buying into.
SCON 10x volume today so far
ReplyDeleteI need to go public...my business does more revenues than these guys!
DeleteHa, yeah these guys are working on making wire for winding power transformers that can protect from power surges. The transfer function of the transformer changes to crowbar the surge as temperature increases. It's not clear to me how the transformer is cooled, during normal conditions, "active" or "passive". "Passive" would be the preference b/c there's should be none or tiny amount of energy consumed for controlling temperature.
DeleteThe focus seems to be manufacturing the wire, which seems to be a challenge. I'm not sure the focus shouldn't be on implementing the wire, still a fail if the wire works yet can't be used. Small samples work as intended, yet for instance a completed transformer that isn't near 90% efficient probably isn''t worth much.
REXX - Notice it did jump, nicely. Does this one scare you guys or are you not allowed to discuss REXX or something? Maybe your "R" key is broken?
ReplyDeleteAnyone care to vote: short or long from here?
ReplyDeleteI say flat tomorrow into the Fed announcement, then a quick fall on the news, followed by a rise into the end of the day.
DeleteWhich is a long way of saying I think we are higher tomorrow.
Probably, no rate change and we VEEEE bottom, but I will not bet it.
DeleteYou have to marvel at gold and oil, weirdest thing I've done well the last three weeks getting back to almost flat, yippee.
I think they do raise rates tomorrow, but looking at gold today, it's saying lower rates for longer and a lower US$ with higher risks of inflation down the road.
DeleteI bought back into TWTR at 27.4 and BITA at 26.4/27.2 today
ReplyDeleteKMI sold out
ReplyDeleteCashed in everything today. cash at end of day works. we probably go higher again tomorrow is my guess too.
ReplyDeleteI'm golfing tomorrow at 3:00. Bad planning as I will have to leave my house shortly after 2:00. But realistically, I find the markets move so fast after an event like the Fed announcement, I probably wouldn't trade anything unless we got another flash crash type situation.
ReplyDeleteChinese buyer might want your house.
ReplyDeleteI'm thinking we're looking at a bull trap. Interesting though all the bearishness ahead of the FED show then short covering b/c they've been trained the FED isn't their friend but now I've got this idea the FED is no longer the friend of bulls
MU - Feeling some love?
ReplyDeleteSPY - 1887 - Looking over the chart, the volume was large that week so I'm thinking there were a lot of buyers taking advantage.
ReplyDeleteI ended up buying back into TWTR at the end of the day.
ReplyDeleteENSV - Ha, my stink bid filled.
ReplyDeleteI've been building out my list of companies that might make the 5/10 year holding period. This is part of the list:
ReplyDeleteV - Need this to pull back
COF
AXP
TIF - Need a little more pull back
BID
WMT
VLKAY
TWTR
GS
KNL
AMGN
CAKE - Need a bigger pullback
BIDU
BITA
My list is on the bigger cap side of things just because that's where I'm finding more value.
What are you thinking of doing with these stocks? If you are going to buy and put away in a retirement account and forget about them, that's one thing. If you are looking for stocks to buy and hold longer term, but still will monitor and potentially sell at full value, that is another.
DeleteBuy and put away for 5 years. I'm looking to set up an account for the kids that is hands off.
DeleteMy self-imposed trading ban will be lifted today with the FOMC announcement. Yesterday's price action in EEM (emerging markets), and to a lesser extent in GDX (miners) + OIH (oils) +XLE (energy) offers potential set-ups today or Friday. I exited all Emerging Markets positions (as well as all other positions) last Friday to avoid unnecessary risk. Yesterday's 'gap up' in EEM on high volume offers valuable insight.
ReplyDeleteNow for the qualifiers:
(a) Price action on the ‘day before’ FOMC is notoriously unreliable. One reason to wait for today’s reaction to FOMC (which is itself subject to one or more false moves).
(b) It’s still a bear market. The SPX hit a 10-day high yesterday, which excited traders. When traders get excited, it’s time to slow down.
(c) Ideally, I try to pinpoint where yesterday’s chasers set their sell-stops, then scale in as they begin to stop out. The strategy is to sit tight while others are buying, then begin buying as they’re stopping out. Given yesterday’s price levels, I’m targeting 33-and-change for an entry into EEM.
(d) Two additional $SKEW prints in the 140+ range (September 14 and September 16) are a concern. $SKEW normally signals tail risk BEFORE it happens. In this case, we have three prints within two weeks FOLLOWING the August 24 crash. I’m not sure what that means. One possible outcome is to see markets spike HIGHER rather than lower. On the other hand, $SKEW has been ‘spot on’ since early 2014.
It’s never ‘easy.’
Here’s a look at all 13 SKEW readings above 140 since its inception in 1990.
Deletehttp://www.zerohedge.com/news/2015-09-17/somethings-askew-market
Doesn't help, when windows stops working.
ReplyDeleteMonarch's eat milk weed. Plant some! :)
ReplyDeleteCrash bids:
ReplyDeleteI do not expect it but just put in low bids above lows of 24 AUG on BXMT BIIB KMI, just in cash lightening strikes twice.
Good idea. Wouldn't be out of character for this market.
DeleteDamn. No rate increase, so we will have to talk about it for at least another month. Don't think it really affects the market, unless we see a big ramp up on this news, which would be a negative reaction I think
ReplyDeleteI would have to think the market doesn't like this in the big picture.
DeleteI really thought they would have the guts to raise rates. Too bad.
DeleteAlways the bull fake going into the meeting..... IMO
DeleteHoly smokes, no rate increase despite global recession? QE4ever....
ReplyDeleteI really thought they would raise too. Maybe us guys who are watching the market see things differently than the Economist watching the economy. Oh well, we just have to accept it and move forward and try and make money regardless
ReplyDeleteMy guess is its unwise to chase here. I suspect we run a little higher and top out for several days, then we drop down and test the lows from August 24th over the coming 2 weeks or so in early October.
DeleteI wasn't sure what the Fed would do today, but I was pretty sure that VIX would drop after the Fed's announcement, since mystery would be out of the picture. Still holding all the VXX puts I purchased during the recent market collapse. Just set a sell limit order on those that I bought first, when VXX was at $22 (purchased the next bunch when VXX was at $26, and the final bunch when VXX was at $30).
ReplyDeleteAlso it is nice to see GDX bouncing today. I was quite surprised to see the mid-August bounce fail, as it failed at the LOWEST level of commercial hedging for any rally. Maybe it was just the unexpected Chinese news that derailed that bounce. Anyway, after that bounce failed, I was expecting GDX to make new lows and keep going down, and I already considered all the calls I purchased as lost money (yet another example of how one loses money when buying options, unless those are long-term VXX puts purchased during a market panic). But today's bounce brings in the new possibility of a double bottom at $13 -- keeping my fingers crossed! :)
ReplyDeleteAdded to ENPH @ 4.51.
ReplyDelete1215 pm pst:
ReplyDelete(a) The Fed leaves rates unchanged ‘amid worries about low inflation and a flare-up in financial volatility at home and abroad.’
(b) Traders appear to view the decision positively. Although ‘no change’ was widely expected, the fact that Fed policy is now officially an instrument for containing volatility is a plus for capital markets.
(c) EEM spiked as much as +2.3% on the news. The ETF has now backed off to print a +0.5% gain.
(d) TLT (the long bond) is up +0.8%.
(e) GDX (miners) are up +3.3%. Not surprising given the plunge in $USD following the announcement.
(f) The DJIA up as much as +136 points.
1230 pm pst:
(a) EEM has now retraced to +0.41%. I could make a case for opening here, as I would be buying while others are selling. However, I prefer a lower-risk entry. Still too much ‘excitement’ (emotion) at play.
(b) DJIA +1 point.
1236 pm pst:
(a) DJIA -11 points.
My plan hasn’t changed. I’ll probably get a better ‘read’ on sentiment after hours, but for now I sense too much panic buying to risk my own capital.
Best 2 days I've had in quite a while.
ReplyDeleteWith the Fed on hold for the next 6 weeks, no panic can occur, and so there is still a lot of money to be made by shorting VXX, especially because VIX is still very high by historical norms...
ReplyDeleteBased on past experience, here's my take on EEM for the next 24 hours.
ReplyDelete(a) Traders who chased today's rally have a serious case of buyer's remorse.
(b) They will be anxiously following overnight action in Asia, hoping for the slightest sign of a rebound on Friday.
(c) In my humble opinion, NOT HAPPENING!
(d) They will toss and turn all night.
(e) On Friday, they will boot up to see bids gap down below their worst fears. In response, they will lower sell stops.
(f) Brokers will begin running those stops in the pre-market session. I plan to start scaling in at that point.
Probably just a dream. In any case, I'll be sleeping soundly tonight!
Glad I went golfing today - doesn't seem like I missed much! No rate hike is disappointing for my overweight financials position, but not big moves.
ReplyDeleteNext couple of weeks will be interesting. I figure a good number of portfolio managers and pensions funds and traders, who were expecting a rate hike, will now be changing their portfolios to reflect their new perspective on the world, so could cause some more volatility.
Personally, I don't think I'll be changing much, but we'll see what happens.
RE TGB,
ReplyDeleteTD reduced their base metals forecasts going forward and re-calced valuation on the base miners. For TGB, they have a hold rating and target of $0.85 (all numbers here are CDN$)
Losses are $0.14 for 2015, $0.11 for 2016 and profit of $0.01 in 2017.
NAV using a 10% discount rates drops to $1.58
This is based on Copper prices of $2.57 in 2015, $2.50 in 2016, ramping up to $3.00 in 2019 and long term prices of $3.10.
So, to buy a miner like this, in my way of thinking, you have to see metals prices being higher than this forecast. Previous price forecasts were about 20% higher and at those prices, EPS was projected at $0.23 in 2017, so you can see the leverage.
There are more details in the report if you want to see it.
BB, thanks I'm good.
ReplyDeleteEurope getting wacked at the moment.
Hard to read too much into this short term action I think.
DeleteFor the next while, you will have sellers because global growth is slower and interest rates are rising as quickly as some thought. So probably sellers in financials, maybe commodities unless the US$ drops a lot, industrials, etc.. But you will have buyers in companies that benefit from lower rates, maybe home builders, car companies, consumer discretionary, etc.
Big money will have a lot of positioning to do.
REIT's and utilities will probably be bought too
DeleteTeachers union bought MAC, maybe now we know why.
DeleteYesterday's buyers? They're all selling today!
ReplyDelete(a) DJIA futures -227 points.
(b) EEM -1.1% in early trading.
(d) Crude oil -3.5%.
What does that mean? It means we're looking to buy.
Bull trap, as I posted a couple days now.
DeleteFCX @ 11.31.
ReplyDeleteNWLI - near 52 week low, trades 11x cash and pays a meaningless dividend.
ReplyDeleteAdded to ENPH at 4.47.
ReplyDeleteLOL, BXE saving the day!
ReplyDeleteWonder what is going on - oil and nat gas down and most energy stocks down as well.
DeleteSomehow, maybe something to do with Canadian Dollar? Can never trust any rally to stick.
DeleteMaybe Canada doesn't want to fall into depression along with Texas, Canada as a country has more power than Tx., being a state?
DeleteNot sure where China will be getting their energy and minerals from, perhaps Mongolia and/or Australia? Right now they claim they don't need anything but longer-term they'll use up those piles and need more.
EVBS - Still flying, no stopping this one?
ReplyDeleteNWLI - Got volume and off it's low so looks like buyers taking charge maybe.
ReplyDeleteReopened RYWVX (Rydex 2x EM) @ the 1030 est window. Opened a position in GPRO @ 34.85.
ReplyDeleteRBY - Back-testing the 50SMA, is this one just a POS or does it have some chance of becoming a star? Miners have been stinkers from before I was born.
ReplyDeleteEPA, California Notify Volkswagen of Clean Air Act Violations
ReplyDeleteENSV - Off, take the gains when they're there.
ReplyDeleteInstead of paying for volatility when buying VXX puts, I just picked up some SVXY -- inverse volatility ETF. Let's see how this works out. :)
ReplyDeleteSAFT - Someone likes this one but seems rather pricey for insurance trading well over book. Dividend is exceptional, on the surface. No debt but earnings don't seem to support dividend unless there's some improvement in income.
ReplyDeleteJust in case, placed a buy limit order for more SVXY at $49.
ReplyDeleteAnd a sell limit order for today's bunch at $60. So whichever way SVXY moves, an order will be triggered for me. :)
ReplyDeleteI really thought they would raise too. Maybe us guys who are watching the market see things differently than the Economist watching the economy. Oh well, we just have to accept it and move forward and try and make money regardless
ReplyDeleteThis is actually the first time I've looked at the market today. No plans on wasting my time in this market right now and I would prefer to just preserve capital. Been scheming up ways to make some additional income streams.
ReplyDeleteWill come back when things settle down which could take months. Good luck fellas.
Take 'er easy guy, this market has cut me deep for sure.
DeleteGood volume in BXE as well.
ReplyDeleteShorts covering ahead of bankruptcy filing?
DeleteThis is probably it....
Deletehttp://www.altacorpcapital.com/acquisitions-divestitures/in-market/bellatrix-non-core-assets.html
How about $62K of quality furniture for under $10K ?
ReplyDeletehttp://www.baltimoresun.com/news/maryland/sun-investigates/bs-md-omalley-furniture-probe-20150918-story.html
Deleteema13 is 2021, exactly where market topped this week. Think of the ecological benefits of a declining global economy, the climate change crowd must be celebrating.
ReplyDeleteGREEN!!!
ReplyDeleteAll I can say is, take it. I was green too but the red was an everyday thing on the trip here.
DeleteEVBS - There we go, suspected that was coming but first they had to create a bull trap.
ReplyDeleteSAFT - Wow, check out the volume. Now what on earth could be going on with that?
ReplyDeleteBXE- Thanks for the link CP. I guess the thinking is they would avoid BK if the price is right....although I don't think BK was ever really in the cards.
ReplyDeleteWe should load up on the stock and submit our non-binding LOI don't you think?
Delete"prospective purchasers are encouraged to present their proposals for acquisition via a non-binding Letter of Intent as promptly as possible as Bellatrix may choose to accept an offer and proceed to negotiate the Purchase and Sale at any time, at its sole discretion without any further notice being given whatsoever."
The goal was to open positions where buyers who chased the past two days were getting stopped out (the ultimate buy point is someone else's sell stop). I opened a few positions in Emerging Markets, oils, and even GoPro! I can't predict what will happen next week, but should I get stopped out myself, buying when others are selling usually gives me a pretty good 'buffer.'
ReplyDeleteAlso took a flyer on ENPH around 4.50 after reading Mark's comment this morning.
DeleteNWLI tested it's recent low, can't say I 've seen many stocks doing that today.
ReplyDeleteZINC - This one didn't get clobbered today. Done going down?
ReplyDeleteKRE - Notice the reversal at resistance. Now there's a gap down to fill, wonder which way this goes next week? Honestly I wouldn't mind lower prices b/c I'm not long but....... What IF?
ReplyDeleteA lot of the smart value guys like the regional banks, but they've been positive on them for a few years now and they've only done OK, but not great. I think they are good long term buys (I own KTHN), but the lift-off for these probably got pushed out this week by Yellen.
DeleteRemember in the 70's ATT promised us Dick Tracy wrist watches? There was also talk about nuclear powered electric family cars, wouldn't that be something?
ReplyDeleteI've been busy researching some rental properties where I went to school in Pennsylvania. I have a friend that owns 5 properties and he's been giving me some great advice on what to consider. These properties are selling for $120-$150k and are renting out for $1,400 to $1,700 a month. He said he has never had a vacancy in the 15 years he has owned his properties because of the constant stream of students coming in. And tuition is over $60k per year so the wealthy parents are usually backing the leases. A $120k place will cost about $37 to $40k up front including renovation and you can clear about $8k per year in net rental income after all expenses. Essentially 20% initial return which goes up over time, which I really don't see how I can reliably generate those returns in the market given what I think could be a horrible trading environment for a while (ie. lots of ups and downs).
ReplyDeleteI've been talking with my friend about buying several. I'll probably be looking to fly out there next month.
BB - Regarding what Yellen said, my initial reaction was they don't envision raising rates for a long time. We very well could be in a scenario similar to what Japan had to deal with, albeit maybe for only 15 years, not 25 and ongoing that they have. In that scenario, the banks/insurers might not trading at higher multiples for a long long time.
That is a great return. Students can be a pain as tenants, but they areusually good for high rates of return. The one thing I've seen hurt student housing is overbuilding by the school or local developers, but other thN that, it is a very sure customer base.
ReplyDeleteRe the financials, if we are in a Japan type scenario, you are right about the valuations. My being diversified across industries industries will hopefully help, but also, all the ones i own are trading ar sub 10 p/e's, so i feel good that he value of the company is increasing by more than 10% a year, so even if low valuatons persist, as long as they don't get worse, my financial stocks should go up at least 10% a year, which is not great, but acceptable.