Another gap up open. Let short-covering lift prices above earlier support (current resistance), then watch fund managers drive a FOMO (fear of missing out) rally into year-end.
Just speculating as today seems to be a gap and go day so far. But the crash from Dow 18,000ish - to Dow 15,500 in August was in 4 days. Would be kind of fitting if the bounce back into Dow 18,000 range also took place over 4 days.
Bounce backs rarely happen as fast as the drops. But I think the premise of a grind back up is definitely in place if you look at how stocks are performing and how sentiment is. The beaten down blue chips are doing quite well...the ones I own have excellent yields to boot.
Very true. The only reason it could this time is because sentiment has gotten so negative and we are getting into Q4, so you could see performance chasing.
But probably a slower ramp up would be more sustainable anyhow.
Today is looking great - of my 35 stocks, the only one in the red is SU, taking a hit because of their buyout offer.
I just can't keep up with current events.... Doesn't feel like a bounce, more like a bottom. Now it's time to watch and see which ones maintain strength.
I agree. I think we see a change of leadership in the stock market coming out of this correction. Biotech's and Social Media were market darlings before the correction, but I think that is over and we have to watch to see what emerges as the new leaders. I think it will be large cap value stocks, but I'd like to see that confirmed in the market.
Wouldn't it make sense to think a growing economy should support small cap growth? I think of large cap along the lines of a type of safety play, not risk on?
I feel like today is the day to really watch closely. PSEC isn't looking strong as it has been. Selling most of MMYT was a mistake EYES is a disaster, anything else out there actually climbing out of the hole don't hesitate to mention it.
Makes sense small cap growth could outperform. The reason I am leaning towards large cap value is because value has underperformed growth for something like 6 or8 years, one of the longest on record, and growth and value go in cycles of outperformance, so it seems value is due. Plus, I think large caps tend to do better as you get late in the cycle as they can leverage their scale and productivity.
But, I think you want to watch and see what happens and try and make sure you are exposed to the right areas.
Yeah, I dunno. There are numerous value ETF's not sure if they're loaded with large or small caps. Retail ETF is loaded with weird stuff...
DVP for instance, is up 3% and didn't just make a new 52wk low while NWLI is up considerably more after also making a new 52 week low.
Crazy stuff, recent action and the magnificent drubbing I've suffered doesn't warrant assuming further risk. No way I'm getting out of this hole, ever.
The Dow is closest to the September 17th highs...something to keep in mind and observe going forward should the market take those highs out here soon. I would imagine if we rip higher that the small caps will catch up. I'm not 100% sure yet if the market is ready to anoint the big caps as the winners and hand off the baton from growth to value. Keep in mind in 1998, which is a period a lot of people are coming this period to, the winners heading into the correction ended up being the winners coming out of it. So I wouldn't be shocked to see some biotechs do really well coming out of this. That's why I have AMAG and might rotate into GILD.
Could be - but I think that guy who raised the drug price from $12 to $750 destroyed the pharma market through the end of the next election. So easy for politicians to hammer on this and public support will be huge behind this. VRX, another bad one (but Canadian, so probably nice people!) down another 10% today.
Bull Case Support - Tobias Levkovich, Citigroup says sentiment and valuation including rates both show 95% chance things re higher in a year and calling for mid-teens return:
Take a look at the moves in INTC and MSFT. Definitely something I think is worth keeping an eye on. Once every year or two these big cap tech stocks tend to make large upside moves and they tend to happen in really short spurts. This is just another reason why my largest position is QCOM
So at which point do I move my 401K into EEM? Should I do it EOD today? Or should I wait for EEM to clear the fed-day spike to 35? Or should I wait for a pullback below the "resistance" band 34.5 - 35?
I sold QCOM at $56.37. I bought it at $53 so big move in a short time with the /ES showing a 81 RSI on the hourly chart. Hoping to hop back in on a small pullback. But also keeping in mind this could all just be a bear market rally
Well, EEM will close today precisely at its previous peak on a daily chart. Interestingly, the worst-performing international fund that is available in my 401k is LZEMX, which today will just rise above the previous two lows on Aug 24 and Sept. 4, which is also a pretty decent accomplishment. So I have just submitted a transaction to move 1/2 of my 401 from a cash fund into LZEMX. If EEM goes up again tomorrow, then I'll move 1/2 of remaining funds into LZEMX and will wait for a pullback to move the last portion.
ZINC - Too funny, not investment worthy if it can't make up it's mind.... The volume screams to me there must be buyers but price action of late indicates a broken company.
Oh, of course if say there was a new mine in outer Mongolia producing more zinc than global demand, we'd be the last to know and the excuse would be "experts didn't see that coming".
So try to remember I guessed it in advance this time and stayed the hell away, okay?
American Apparel losses over 6 years exceed $400M...... Wow, bleed shareholders to nothing then declare BK sure sounds familiar. CEO probably made 200x employee average.
David - Maybe this chart will explain the sentiment that I think the market is going through right now. Keep in mind I'm looking at this from a shorter term time frame...I think we're somewhere around Denial. The market should slow down here for a few days. If the high yield market holds up and the dollar/yen cross holds up, then I think we go higher.
Trimmed a few positions near the close and after hours:
(a) FCX (Freeport McMoran) closed @ 11.10 for a +23.47% gain (opened 9/29 @ 8.99). (b) CHK (Chesapeake) closed @ 8.37 for a +23.7% gain (opened 9/29 @ 6.80). (c) EEM (emerging markets) partially closed @ 34.55 for a +8.5% gain (added a position 9/29 @ 31.85).
Too easy to think shorts get relief on Tuesday. More likely, bulls will take 'the SPYders' to 204+ (to resistance, and then some) before easing up on the pedal.
If you are going to move a large position into EEM for a longer term hold, I'd strongly recommend doing it in stages. Maybe do like a quarter this week, then another quarter if we get a pullback, or if not within a month, do the next quarter and so on.
Nothing worse than having a big market pullback after you just go all-in or a market get away from you before you get a chance to get any exposure. Go in in phases reduces the risk and helps prevent emotional decisions.
Although studies have shown that if you're looking to buy for the long term then you should put everything in today no matter what, assuming you admit you have no knowledge of where the market is going in the near term.
If I had to choose between EM and US, I think I would always choose US over longer periods. There's too much risk in other markets and I think its worth paying more for US
Interesting...I was just looking at longer term charts and WMT and QCOM both broke out above the 2007/8 highs and just came back and retested those highs in the past 3 months. Wonder if this is a precursor for the market or if it is just a one off thing.
Speaking about my 401K, I do not want to buy something now and just forget about it. I am pretty sure that in the near future we'll have a major bear market, and so I view today's purchase as a play on the market sentiment that went extremely negative without a good reason, thus paving a way for a nice rebound rally. I get charged 1% if I sell within a month, and I just hope that the next leg down will not start within a month. With this view, BB's idea of scaling in probably makes the most sense, and that is the reason I put only 1/2 of my 401K into LZEMX today. I'll put in 1/2 of the remaining cash on a pullback, when 2nd_ave buys it back after selling it at $36. :)
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Tough to buy it here given how far its come and prior resistance at $16 after earnings. Then again, if you're willing to hold it a long time, I think it's got a ton of upside.
Based strictly on balance sheet or a particular semi device? Thinking of joining, WIFI chip is QCOM I believe, not sure what else. Bluetooth was treating NXPI right for a while.
Lots of crosswinds today. Biotechs getting bludgeoned. Dollar down below its 200DMA, which is putting a bid in RSX, EWZ, Gold, Silver, Gold miners, oil. On the other hand, USD/JPY is still stuck in a range and yesterdays breakout is looking like a fakeout (USD/JPY is highly correlated with the overall market...see this old article...correlation has gotten strong since: http://www.businessinsider.com/correlation-between-us-stocks-and-yen-2013-6). Also, HYG is holding up ok.
As long as USD/JPY and HYG hold in I feel ok about this pullback. If we see USD/JPY drop and stay below 119.5 then I will get cautious. And if HYG can't gather any steam I will get cautious.
SPH - Right at top of this steep off the cliff channel. wow, would've been a good one to buy on the big plunge and I nearly did within a dime of the low but passed. I'm learning my lesson I guess.
Uranium prices will be in huge trouble if dynamic fast breader-reactors catch on like LMT claims b/c they can either burn fuel or produce it and in-situ tuning dynamically allows going wither way. Negative temperature coefficient means the reaction is limited as heat builds the reaction weakens.
I think they can use these to manufacture hydrogen, as well.
IBB - Okay so WTF, no more human infant tissue laboratory experimentation or what? Nope, instead coal is coming back. Thanks Hillary, for saving coal before winter arrives so I don't have to freeze. NSC - Breaking out of trend line?
I bought based strictly on fundamentals and valuation. Plus QCOM has a catalyst in that they were talking breaking up the company into its chip business and the licensing business. And they have an activist in there that will definitely agitate for a move. They have 30% of value in cash and do $7-8Billion in free cash flow per year. And pay a 3.5% dividend.
I'm actually debating just buying SPXL heading into year end. I think we will hit 2,100 again before the end of the year, assuming HYG and USD/JPY hold up and there are no serious divergences into year end. In that scenario, SPXL will be up 18%. I'll be hard pressed to find a lot of blue chips that will rally more than that. I might have to look at the mid cap stuff instead.
I ended up buying a position in ZG today at $29.51. That stock hasn't budged since all of this market turmoil and has traded sideways for 2 years now. I think it's going to rally into the end of the year.
Mike, "buying and forgetting" was shown to give excellent results on a 10-year horizon if one starts at historically low PE ratios. The current US P/E ratios are closer to the high than to the low side, especially considering the fact that profit margins are known to be very mean reverting and are currently standing at all-time highs. So even though US markets might be safer than emerging markets, all that safety is already priced into US and then some more. I am sure we'll return to the discussion of buying and forgetting at the bottom of the next bear market, when P/Es will finally get to be low...
here's a good link to the historical S&P 500 earnings: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/spearn.htm
We are currently at 17.2x trailing earnings vs a 55 year avg of 16.31. The 4-year compounded annual growth rate of earnings has been 8.2% vs an average of 7.04% historically. I wouldn't say that the valuation of the market is that extreme actually, especially in light of above average earnings growth and 2% ten year rates (stocks always compete with bonds so it's important to compare the two).
To tell the truth cannot remember who lived and died in the finale, but liked the one by the pool in Mexico the best when he drug them with their favorite drink.
I can still remember the one guy saying we are all going to get out of here alive or not.
Even though SLV/GLD pulled back from morning highs, GDX staged an EOD rally -- that's nice! Looks like investors are expecting still higher GLD/SLV prices in the near future...
HYG is up today despite SPY being slightly down, so I would say that we saw today just some temporary profit taking, which was followed by re-loading at mid-day lows. Expect higher prices in the near future.
I think the ideal way for this sector to bottom is if it hits the lows multiple times over several months. We have had a retest. I think maybe there's a false breakdown lower that could trap a lot of shorts.
I hope so. We have the catalyst probably nearby in that if interest rates do start to rise, the life insurers will almost certainly have outsized moves to the upside.
(a) I was not far off thinking they would take the Dow +1000 points higher. DJIA +140 points @ 16,928 this morning. (b) EEM (Emerging Markets) up another +3%. Ouch. Having disembarked yesterday, I'm having coffee with Aunt Nellie. (c) PBR (Petrobras), CHK (Chesapeake), BABA (Alibaba)-> all trading well above my exit points.
So what's next? SPY changing hands around 199 this morning. At 204, I think it's a low-risk short.
In addition to RYWYX, added a small position in RYTPX (Rydex 2x Inverse SPX) @ the 1030 window. We need a 'pause' to launch the year-end rally. The fuel for that decline may well be supplied by this morning's chasers.
GILD - Considering this one, looks like bear flag though so maybe I can enter a little lower. Someone call Hillary and ask if she's committed to affordable healthcare or just going through the motions, please.
Bought some EROS at $29.47. I actually found this company back in July of last year but never bought it for some unknown reason. They own the largest film production company in India and are building out an online streaming platform for all of their content. They have an activist investor working with them to push this strategy. Here's a good article on them:
The valuation is fairly high but if you take into context what they are building with the potential future growth in monthly recurring revenues and the massive amount of content that they own, the valuation is actually reasonable. And given that it has been consolidating here for the past 3 months in the high 20's while the market dropped hard, I think it has held up really well and could make a push much higher. Investors will compare its valuation at $1.6Billion to NFLX at $46 Billion...and think there's plenty more upside.
For a stock that doesn't trade much, went from $215 to almost $245 in under 3 days - no news and no rumours I can see. They did reorg to a Delaware company, but that closed Oct 2 and was well know for months. The thought is they may have done this to do acquisitions or maybe some better capital management, but nothing out there. And this is with interest rates looking to stay low.
SGG - Whelp, that ran unnoticed... A higher high, a prize which the GDX can't lay claim. GDX clearly seems to have outperformed GDXJ as well, not meeting the criteria indicative of a PM Renaissance. TBT trend remains unclear, still a bit of guessing required. Trading below the opening price at the moment.
"We need a 'pause' to launch the year-end rally. The fuel for that decline may well be supplied by this morning's chasers."
2nd_ave, after the double bottom in 2011, SPY went up for 4 weeks straight before pulling back to a higher low, which then paved the way for a sustained rally...
Yeah, I mentioned yesterday that shorting down there was lunacy. I read several people commenting on stocktwits about how they were short bios. They finally had the courage to speak up as they were shorting into the hole. Classic trap.
i think people have wised up to the deathtraps that are fast food. sure there are still lots of people going there, but if the MCD's etc of the world don't change their menus fast they will slowly die off.
Can't put anything past MCD management as they have been able to pivot well over the years. And despite people knowing how bad their food is, the country's population is only getting more obese.
MCZ - Rock Band 4, whatever that is. This one has doubled and you had plenty of time to accumulate. What are the chances bluechip GE can accomplish anything close? NWLI - What's up with that entire year of lower lows..... Who could endure that kind of action?
EEM is already above its intraday spike on Sept. 17. SPY has to follow soon. On the day when it does, the last of the disbelievers will jump in, probably causing a massive day rally, which will be a good time to sell before reloading on a small pullback (which usually happens to upset those who jumped in at the "final" confirmation of the correction being over).
Wonderful. I didn't even realize that I already sold GPRO...at the lows of the day. I averaged down and when it was at $27.6 I put what I thought was an order to sell at $28.6. Turns out I put an order to sell at $27.6. A fat finger trade.
That’s a chart of New York-listed Eros International, one of India’s largest film studios and the folks responsible for some of the best dance scenes of the decade, popping 10 per cent yesterday.
And Alphaville’s usually well informed sources think they know why. This is RAW, obviously…
According to said well informed sources, Eros have hired Goldman Sachs to find them a strategic investor who wants to pick up a 20 per cent stake in the company. And we hear they’re pretty close to a deal, with the race primarily between Amazon and a mystery Chinese company.
The idea of a strategic investor is, presumably, to find a body that can help Eros with its ambitions to become the Netflix of India. The Bollywood Netflix, if you will. And it wants to do so before the actual Netflix gets there first, naturally.
Last July, and ahead of the expected 2016 entry into India of its vastly larger competitor, Eros unveiled the latest iteration of its Eros Now service, which offers streaming Bollywood movies, television shows and music to about 19m users. There’s a market which will apparently be worth Rs1.2trn ($19bn) by 2020, according to KPMG, up for grabs.”
Late session numbers mildly encouraging for shorts at best.
(a) DJIA has pulled back -0.4% from 1030 highs (now +63 points). (b) EEM (Emerging Markets) + FXI (China 'H' Shares) off -1% from 1030 highs. Better yet, EWZ (Brazil) -2.9% from the highs. It's OK to buy higher in a bull market, a dangerous strategy in a bear market. (c) Opened a position in GPRO around 28 this morning on a downgrade. This stock has really taken a pounding. Now 28.75.
The market's resilience tells me that a ton of traders missed last week's rally, and are ready to buy any dip. The question is whether the market will continue to reward such behavior.
Will be interesting to see how the market reacts to this over the next few days. It s bad news, but if people think all the bad news is out, maybe we can start building a base for a strong move upwards. I still hold DB and think there are a lot of things that can go right, but it seems to be a multi-year story now. So probably have to be patient or just move on.
Out golfing with my Blackberry friend today and he got an email "meeting at 9:00 AM tomorrow, imperative you attend, at the office, details will be sent out in the morning"
But the catch is his boss who sent him the email is in the middle of a 2 week vacation and lives in the UK and always does meetings by phone.
He will get a good package at least. Was a direcctor there for 8 years. Prrobably get 6 or 8 months payout. He's been hating it for a couple years now, so probably will end up being good, but still not a nice feeling.
DB up in Europe and bid in US higher this morning. People seeing the writedowns as getting rid of he problems and setting up for future. No capital raise likely either.
"NWLI - What's up with that entire year of lower lows..... Who could endure that kind of action?"
> CP, really depends on your style. Hasn't bothered me at all as I know the underlying company value is going up and at some point this will get reflected in the stock price. But I have no trouble being patient and know my approach gets me good returns over time.
Seth Klarman, who is one of the very best value investors, writes: “Short–term underperformance doesn’t trouble us; indeed, because it is the price that must sometimes be paid for longer-term outperformance.”
Covering both shorts at the 1030 est trading window.
(a) RYTPX (Rydex 2x Inverse SPX) was opened at Wednesday's highs. The SPX -0.2% retreated into yesterday's close, and currently off another -0.3%. Expected gain about +1.1%. (b) RYWYX (Rydex 2x Inverse EM) also opened at Wednesday's highs. EEM retreated -0.3% into yesterday's close, and currently off another -0.55%. Expected gain +1.7%. (c) Adding to GPRO @ 27.68.
Note that the Shanghai Composite closed up just +3% last night versus an expected +8. Head fake? Maybe. Still bullish heading into year-end.
Kirk Spano likely taking a beating, both in terms of his portfolio and his client base, due to EXAS. That's the kind of single stock risk that can destroy a career. I believe EXAS was his largest position as of August, a stock for which he was the loudest cheerleader.
Especially in public. To be fair, the guy bought in around $1/share, so he's still way ahead. But anyone who listened to him in the past year (including those who bought on his calls to load up in the low twenties) are not so fortunate.
FCAU back above $15 and Ferrari coming out soon. Actually, sentiment on all the auto makers is better and they've all had good runs. Think people realize that trouble for VW means more sales for the rest, kind of like when JC Penny had their trouble and all the other retailers did well.
Been thinking about energy stocks and they've had a nice move off the bottom, but still down a lot, especially the small caps. Been trying to decide whether to buy some, but keep thinking every quick bounce like this almost always has a pullback, so they should get cheaper. Also, we may see a bunch of selling into year end as part of tax loss selling as a lot of people will have losses in these.
Might be wrong, but the more I think about it the more I like the idea of waiting a couple months and see how things shake out and how the supply/demand stats come out and, if things still look good, picking up some into year end.
If they do continue to ramp up, I still have some exposure, so not the end of the world.
I'm still thinking we see low oil for a while. Seems to me that it will follow Nat in being low for a while due to huge supply from better drilling methods.
I honestly have no basis for this opinion, just thinking about it more in terms of sentiment. I think we had a massive bubble for a decade or so and that it takes time to work off the excesses
That's another reason I'm holding off. Big bears generally follow big bulls, so it may be a lot longer and i'm hoping to see clearer fundamental data in the next couple months.
I kind of started changing my opinion on biotechs a few days ago and still feel this way. I was focusing a lot of the move from the 2009 low but in all reality, biotechs didn't do much for about a decade. instead, i should be comparing the move from the 2011 breakout to the move in the Nasdaq from 1993 or so. that is why i said the other day that I don't think it's wise to short em down here. maybe there's a little more downside...maybe a false breakdown...but I would be looking to pick up beaten down biotechs here instead of trying to short them.
So if biotechs are similar to the dot com / nasdaq bubble, this very well could only be 4 years into the bubble. and the nasdaq bubble didn't really start until 1993/1994. the better way to look at them is maybe this is their 1998. a sharp pullback before melting up. i doubt that happens here because of increased govt scrutiny on them as a whole. ideally, the best thing is for them to consolidate over a period of 6-12 months but the froth could coming roaring right back in.
i like SCMP, AMAG for small caps and AMGN for larger caps. I think GILD is probably a good one too but too much emphasis on one drug for its revs so its a little riskier than AMGN
Is the late day spike up in SPY and spike down im VIX going to be all we get for clearing the intraday highs of Sept 17? I don't think so. Many investors will look at the closing price tonight, breath a sign of relief, and will put in a buy order for tomorrow. If we do get a large rally tomorrow, without this cautious stuff of mid-day pullback getting bought just enough to go green at the end, then it would be a good chance to unload short term positions.
SVXY hit my sell limit order at 56 today for the shares I purchased at 53. That was my last bunch. Now will start selling VXX puts. Will sell some tomorrow if we get a large up day.
On the other hand, the VIX futures have just entered a proper contango structure today, so the longer I hold on to VXX puts, the more it should melt away...
we seem to be following the same script. If so, then we should expect a few more days of oscillation around 200, and then when all impatient traders sell for a small profit, SPY should move up about 50% of the distance between double bottom lows and September high, getting to about 205, as 2nd_ave had predicted. At that point, it should pause for some time and then pull back to a higher low. Let's see if this script works out.
Mike, I understand your market analogy between Biotechs and Nasdaq. Another way to look at it is the Nasdaq p/e was around 30 in 1998 and didn't get the outrageous 100+ p/e's until the final move upward in 1999/2000. IBB already has the 100 p/e's, so that could indicate we've had the final push. Even the momo traders know you can only push valuation so far.
Away most of the day, but given the opportunity I would have reopened shorts in EM + SPX at today's close. Bullish over the next few months, but turning bearish over the next few days.
Just speculating as today seems to be a gap and go day so far. But the crash from Dow 18,000ish - to Dow 15,500 in August was in 4 days. Would be kind of fitting if the bounce back into Dow 18,000 range also took place over 4 days.
ReplyDeleteBounce backs rarely happen as fast as the drops. But I think the premise of a grind back up is definitely in place if you look at how stocks are performing and how sentiment is. The beaten down blue chips are doing quite well...the ones I own have excellent yields to boot.
DeleteVery true. The only reason it could this time is because sentiment has gotten so negative and we are getting into Q4, so you could see performance chasing.
DeleteBut probably a slower ramp up would be more sustainable anyhow.
Today is looking great - of my 35 stocks, the only one in the red is SU, taking a hit because of their buyout offer.
Grind back up, FOMO is as good an assessment as any. Too bad I let go of half MMYT during the FED rate fiasco, assuming that's what it was all about.
ReplyDeleteMike,
ReplyDeleteKind of funny that you are holding large cap, dividend paying stocks.
But I do think that is the right thing to do and the area of the market which outperforms the next few years.
Yeah it's pretty boring but that's where the true value is I this market. Them and a few biotechs ironically. I have wmt qcom ibm AFL Amag right now
DeleteI just can't keep up with current events.... Doesn't feel like a bounce, more like a bottom. Now it's time to watch and see which ones maintain strength.
ReplyDeleteCP,
DeleteI agree. I think we see a change of leadership in the stock market coming out of this correction. Biotech's and Social Media were market darlings before the correction, but I think that is over and we have to watch to see what emerges as the new leaders. I think it will be large cap value stocks, but I'd like to see that confirmed in the market.
Wouldn't it make sense to think a growing economy should support small cap growth? I think of large cap along the lines of a type of safety play, not risk on?
DeleteNEWM - This one's really strong
ReplyDeleteI feel like today is the day to really watch closely. PSEC isn't looking strong as it has been. Selling most of MMYT was a mistake EYES is a disaster, anything else out there actually climbing out of the hole don't hesitate to mention it.
ReplyDelete1,000 year record rains? Just heard that..... didn't catch it all Nepal maybe?
ReplyDeleteIEP - If I owned this one I'd likely be upset with Icahn's antics. Fair assessment?
ReplyDeleteDowUp 200, where's the FED official calling for rate hikes b/c economy is overheated?
ReplyDeleteNWLI - Set a stop limit and get your nuts chopped off.
ReplyDeleteCP,
ReplyDeleteMakes sense small cap growth could outperform. The reason I am leaning towards large cap value is because value has underperformed growth for something like 6 or8 years, one of the longest on record, and growth and value go in cycles of outperformance, so it seems value is due. Plus, I think large caps tend to do better as you get late in the cycle as they can leverage their scale and productivity.
But, I think you want to watch and see what happens and try and make sure you are exposed to the right areas.
Yeah, I dunno. There are numerous value ETF's not sure if they're loaded with large or small caps. Retail ETF is loaded with weird stuff...
DeleteDVP for instance, is up 3% and didn't just make a new 52wk low while NWLI is up considerably more after also making a new 52 week low.
Crazy stuff, recent action and the magnificent drubbing I've suffered doesn't warrant assuming further risk. No way I'm getting out of this hole, ever.
The Dow is closest to the September 17th highs...something to keep in mind and observe going forward should the market take those highs out here soon. I would imagine if we rip higher that the small caps will catch up. I'm not 100% sure yet if the market is ready to anoint the big caps as the winners and hand off the baton from growth to value. Keep in mind in 1998, which is a period a lot of people are coming this period to, the winners heading into the correction ended up being the winners coming out of it. So I wouldn't be shocked to see some biotechs do really well coming out of this. That's why I have AMAG and might rotate into GILD.
ReplyDeleteI meant AMGN, not GILD. I prefer AMGN due to the diversity of revenues.
DeleteCould be - but I think that guy who raised the drug price from $12 to $750 destroyed the pharma market through the end of the next election. So easy for politicians to hammer on this and public support will be huge behind this. VRX, another bad one (but Canadian, so probably nice people!) down another 10% today.
DeleteYeah its definitely something I'm thinking about
DeleteBull Case Support - Tobias Levkovich, Citigroup says sentiment and valuation including rates both show 95% chance things re higher in a year and calling for mid-teens return:
ReplyDeletehttp://video.cnbc.com/gallery/?video=3000427834
Take a look at the moves in INTC and MSFT. Definitely something I think is worth keeping an eye on. Once every year or two these big cap tech stocks tend to make large upside moves and they tend to happen in really short spurts. This is just another reason why my largest position is QCOM
ReplyDeleteBBBY looks interesting too. Down1/3 this year, p/e around 11 and rumours of the business being sold.
DeleteNot sure why QCOM is so cheap - is there fear they will be losing some major business soon?
That plus worries about China
DeleteSo at which point do I move my 401K into EEM? Should I do it EOD today? Or should I wait for EEM to clear the fed-day spike to 35? Or should I wait for a pullback below the "resistance" band 34.5 - 35?
ReplyDeleteIf we clear the Sept 17th high for the overall market then the correction is over.
DeleteI'd like to sell into EEM 36, and buy back around 34.
DeleteI sold QCOM at $56.37. I bought it at $53 so big move in a short time with the /ES showing a 81 RSI on the hourly chart. Hoping to hop back in on a small pullback. But also keeping in mind this could all just be a bear market rally
ReplyDeleteHave a look at TSM, nothing gets done without the foundries.
DeleteSomething I definitely considered. Balance sheet isn't as strong as QCOM
DeleteWhere will the survivors be buried?
ReplyDelete"If we clear the Sept 17th high for the overall market then the correction is over."
ReplyDeleteAre you talking about intraday high or EOD price?
closing prices
DeleteWell, EEM will close today precisely at its previous peak on a daily chart. Interestingly, the worst-performing international fund that is available in my 401k is LZEMX, which today will just rise above the previous two lows on Aug 24 and Sept. 4, which is also a pretty decent accomplishment. So I have just submitted a transaction to move 1/2 of my 401 from a cash fund into LZEMX. If EEM goes up again tomorrow, then I'll move 1/2 of remaining funds into LZEMX and will wait for a pullback to move the last portion.
DeleteDavid - If you view this money as LONG TERM then who cares?
DeleteSorry meant to say then who cares when you buy it? Over the longer term those funds will go up.
DeleteZINC - Too funny, not investment worthy if it can't make up it's mind.... The volume screams to me there must be buyers but price action of late indicates a broken company.
ReplyDeleteOh, of course if say there was a new mine in outer Mongolia producing more zinc than global demand, we'd be the last to know and the excuse would be "experts didn't see that coming".
So try to remember I guessed it in advance this time and stayed the hell away, okay?
DJIA +311 points in late session trading. Now we're about +700 points above where Aunt Nellie disembarked. SPY changing hands @ 198.41.
ReplyDeleteEEM +2.1%, EWZ (Brazil) +2.13%, FXI (China 'H' Shares) +1.7%.
My guess is that prices will begin to meet heavy resistance around SPY 204 (S&P500 2040). Until then, tough sledding for shorts.
The Shanghai Composite will be closed another two days (five days total for National Day celebrations).
ENPH. Holly crap.
ReplyDeleteNice. Are you still holding? Can't keep track
DeleteThose are the same words I used on the way down. WTF!
DeleteAmerican Apparel losses over 6 years exceed $400M...... Wow, bleed shareholders to nothing then declare BK sure sounds familiar. CEO probably made 200x employee average.
ReplyDeleteDavid - Maybe this chart will explain the sentiment that I think the market is going through right now. Keep in mind I'm looking at this from a shorter term time frame...I think we're somewhere around Denial. The market should slow down here for a few days. If the high yield market holds up and the dollar/yen cross holds up, then I think we go higher.
ReplyDeletehttp://s719.photobucket.com/user/lasertradercharts/media/sentiment-cycle1-1.jpg.html
DeleteTrimmed a few positions near the close and after hours:
ReplyDelete(a) FCX (Freeport McMoran) closed @ 11.10 for a +23.47% gain (opened 9/29 @ 8.99).
(b) CHK (Chesapeake) closed @ 8.37 for a +23.7% gain (opened 9/29 @ 6.80).
(c) EEM (emerging markets) partially closed @ 34.55 for a +8.5% gain (added a position 9/29 @ 31.85).
Too easy to think shorts get relief on Tuesday. More likely, bulls will take 'the SPYders' to 204+ (to resistance, and then some) before easing up on the pedal.
damn. well done
DeleteDavid,
ReplyDeleteIf you are going to move a large position into EEM for a longer term hold, I'd strongly recommend doing it in stages. Maybe do like a quarter this week, then another quarter if we get a pullback, or if not within a month, do the next quarter and so on.
Nothing worse than having a big market pullback after you just go all-in or a market get away from you before you get a chance to get any exposure. Go in in phases reduces the risk and helps prevent emotional decisions.
Although studies have shown that if you're looking to buy for the long term then you should put everything in today no matter what, assuming you admit you have no knowledge of where the market is going in the near term.
DeleteIf I had to choose between EM and US, I think I would always choose US over longer periods. There's too much risk in other markets and I think its worth paying more for US
DeleteInteresting...I was just looking at longer term charts and WMT and QCOM both broke out above the 2007/8 highs and just came back and retested those highs in the past 3 months. Wonder if this is a precursor for the market or if it is just a one off thing.
ReplyDeleteThat is interesting.
DeleteTOF- Yep, still in a full ENPH position. Basis is maybe 4.20ish. I know damn well I should have sold into the close but....
ReplyDeleteGreed. We all experience it...
DeleteTotally. I still think there is one more big catalyst...JPM switching for hold to buy on valuation.
DeleteSpeaking about my 401K, I do not want to buy something now and just forget about it. I am pretty sure that in the near future we'll have a major bear market, and so I view today's purchase as a play on the market sentiment that went extremely negative without a good reason, thus paving a way for a nice rebound rally. I get charged 1% if I sell within a month, and I just hope that the next leg down will not start within a month. With this view, BB's idea of scaling in probably makes the most sense, and that is the reason I put only 1/2 of my 401K into LZEMX today. I'll put in 1/2 of the remaining cash on a pullback, when 2nd_ave buys it back after selling it at $36. :)
ReplyDeletefwiw, I no longer believe in 'buying and forgetting about it.' It just doesn't work.
DeleteB&H has to include scaling in I think.
DeleteB&H can work on the US indexes. overseas ones are trickier in my opinion.
DeleteEXAS -35% after some USPSTF draft says their colon screening nonsense doesn’t work (duh) (FLY)
ReplyDeleteYet another example of why I refuse to 'buy and hold.'
DeleteReopening a small position @ 10.85.
Trimmed BABA @ 64.60 near the open.
ReplyDeletePlan to close a position in RYWVX (Rydex 2x EM) @ the 1030 est trading window.
My thesis re a continuing short squeeze today has not panned out, and I'm now moderately bearish over the next few days.
DeleteMMYT - Stop trail 1% just to be sure I take gains on remainder, not a loss.. Then look for a re-entry.
ReplyDeleteTrailing stop quote limit orders rely on market data to calculate the current stop and limit prices based on your stop and limit trail amounts and the national best bid or offer. Volatile market fluctuations, system outages and market data errors and omissions including misquotes (e.g., “bad ticks”) could unexpectedly activate or delay your order.
DeleteOnce activated, your order will become a limit order and may not execute if the stock’s price moves away from the limit price, which may occur in a fast-moving market.
Currently $15.57
DeleteCurrently $15.81 - I think I'll like this type of order, about time I get a gainer to try it with.
DeleteFilled at 1.27% below the high for some reason not 1% as ordered.
DeleteTough to buy it here given how far its come and prior resistance at $16 after earnings. Then again, if you're willing to hold it a long time, I think it's got a ton of upside.
DeleteMeanwhile I'm gonna attempt trading this fish.
DeleteIEP - Someone sure likes Icahn, seems like? what's up there?
ReplyDeleteHaven't done much today...I closed out of WMT and rolled it into QCOM.
ReplyDeleteBased strictly on balance sheet or a particular semi device? Thinking of joining, WIFI chip is QCOM I believe, not sure what else. Bluetooth was treating NXPI right for a while.
DeleteCould be a next-gen comm chip in the pipeline?
Lots of crosswinds today. Biotechs getting bludgeoned. Dollar down below its 200DMA, which is putting a bid in RSX, EWZ, Gold, Silver, Gold miners, oil. On the other hand, USD/JPY is still stuck in a range and yesterdays breakout is looking like a fakeout (USD/JPY is highly correlated with the overall market...see this old article...correlation has gotten strong since: http://www.businessinsider.com/correlation-between-us-stocks-and-yen-2013-6). Also, HYG is holding up ok.
ReplyDeleteAs long as USD/JPY and HYG hold in I feel ok about this pullback. If we see USD/JPY drop and stay below 119.5 then I will get cautious. And if HYG can't gather any steam I will get cautious.
Otherwise, I like the beaten down blue chips.
SPH - Right at top of this steep off the cliff channel. wow, would've been a good one to buy on the big plunge and I nearly did within a dime of the low but passed. I'm learning my lesson I guess.
ReplyDeleteUranium prices will be in huge trouble if dynamic fast breader-reactors catch on like LMT claims b/c they can either burn fuel or produce it and in-situ tuning dynamically allows going wither way. Negative temperature coefficient means the reaction is limited as heat builds the reaction weakens.
ReplyDeleteI think they can use these to manufacture hydrogen, as well.
VA wooing a brewery. Once here, probably rob them blind with regulations.
ReplyDeletePIR - Any chance of recovery? My broker nailed that one.
ReplyDeleteIBB - Hillary the lightening rod? Wow, liberals hate everything and everybody and never do what they say (aside from killing stuff like coal) or what?
ReplyDeleteBTU - Going to $60?
ReplyDeleteIBB - Okay so WTF, no more human infant tissue laboratory experimentation or what? Nope, instead coal is coming back. Thanks Hillary, for saving coal before winter arrives so I don't have to freeze.
ReplyDeleteNSC - Breaking out of trend line?
CP - you asked about QCOM.
ReplyDeleteI bought based strictly on fundamentals and valuation. Plus QCOM has a catalyst in that they were talking breaking up the company into its chip business and the licensing business. And they have an activist in there that will definitely agitate for a move. They have 30% of value in cash and do $7-8Billion in free cash flow per year. And pay a 3.5% dividend.
I'm actually debating just buying SPXL heading into year end. I think we will hit 2,100 again before the end of the year, assuming HYG and USD/JPY hold up and there are no serious divergences into year end. In that scenario, SPXL will be up 18%. I'll be hard pressed to find a lot of blue chips that will rally more than that. I might have to look at the mid cap stuff instead.
Sold QCOM at $56.4. Just hoping for another dip to buy back
ReplyDeleteEnded up just buying back at the same price.
DeleteI'd rather just hold this I think given how cheap it is and with catalysts coming up soon.
DeleteI ended up buying a position in ZG today at $29.51. That stock hasn't budged since all of this market turmoil and has traded sideways for 2 years now. I think it's going to rally into the end of the year.
ReplyDeleteMike, "buying and forgetting" was shown to give excellent results on a 10-year horizon if one starts at historically low PE ratios. The current US P/E ratios are closer to the high than to the low side, especially considering the fact that profit margins are known to be very mean reverting and are currently standing at all-time highs. So even though US markets might be safer than emerging markets, all that safety is already priced into US and then some more. I am sure we'll return to the discussion of buying and forgetting at the bottom of the next bear market, when P/Es will finally get to be low...
ReplyDeletehere's a good link to the historical S&P 500 earnings:
Deletehttp://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/spearn.htm
We are currently at 17.2x trailing earnings vs a 55 year avg of 16.31. The 4-year compounded annual growth rate of earnings has been 8.2% vs an average of 7.04% historically. I wouldn't say that the valuation of the market is that extreme actually, especially in light of above average earnings growth and 2% ten year rates (stocks always compete with bonds so it's important to compare the two).
You guys may be interested in this:
Deletehttp://www.marketfolly.com/2015/10/john-burbank-lecture-at-uc-berkeley.html
Burbank goes into issues you have been talking about tho somewhat dated, he has interesting conclusion.
I see you guys have been making awesome trades in my absence, I should go away more often
Yo.
ReplyDeleteWhat's up?
DeleteI finished up Breaking Bad last night on Netflix. Best show I've ever seen.
I kinda burned out on it about halfway through. Damn good though for a while.
DeleteI watched the whole last season in three days when I was sick and loved it.
DeleteTele- Didn't you think the very end was kinda lame?
DeleteTo tell the truth cannot remember who lived and died in the finale, but liked the one by the pool in Mexico the best when he drug them with their favorite drink.
DeleteI can still remember the one guy saying we are all going to get out of here alive or not.
Amazing how they decimated things going into Q3 end only to gush back into them the start of Q4, think oils, metals.
ReplyDeleteMoving to 100% cash end of day, which means closing all remaining EM positions. RYWVX (Rydex 2x EM) closed the 1030 window @ 42.27 for a +12% gain.
ReplyDeleteStill expecting a year-end rally, but hoping to reload at lower prices.
ENPH. This is right around where I 'wanted' to sell it about 3 weeks ago. Much smaller position then.
ReplyDeleteSo you're selling?
DeleteNot yet. I think it can get a buck higher easy.
DeleteEven though SLV/GLD pulled back from morning highs, GDX staged an EOD rally -- that's nice! Looks like investors are expecting still higher GLD/SLV prices in the near future...
ReplyDeleteHYG is up today despite SPY being slightly down, so I would say that we saw today just some temporary profit taking, which was followed by re-loading at mid-day lows. Expect higher prices in the near future.
ReplyDeleteI agree. I would say the pain trade has to be higher still...maybe we get a bear trap in the morning?
DeleteI sold out of QCOM into the close.
ReplyDeleteI think there's a decent chance the biotechs are bottoming. I wouldn't be short them here.
ReplyDeleteI think the ideal way for this sector to bottom is if it hits the lows multiple times over several months. We have had a retest. I think maybe there's a false breakdown lower that could trap a lot of shorts.
DeleteSome kind of a pullback today! LZEMX was up 0.84%. :)
ReplyDeleteREXX - Just for the record, I nearly bought this last week but was too preoccupied.
ReplyDeleteNWLI - Looks like a breakout is about to happen, like a tight spring.
ReplyDeleteI hope so. We have the catalyst probably nearby in that if interest rates do start to rise, the life insurers will almost certainly have outsized moves to the upside.
DeleteShoot I almost bought that at 220 yesterday
Deletehttp://yragharris.com/2015/10/06/hike/
DeleteYeah, I won't bother mentioning what I think. Except it still feels like catching a knife.
DeleteShort squeeze underway this morning.
ReplyDelete(a) I was not far off thinking they would take the Dow +1000 points higher. DJIA +140 points @ 16,928 this morning.
(b) EEM (Emerging Markets) up another +3%. Ouch. Having disembarked yesterday, I'm having coffee with Aunt Nellie.
(c) PBR (Petrobras), CHK (Chesapeake), BABA (Alibaba)-> all trading well above my exit points.
So what's next? SPY changing hands around 199 this morning. At 204, I think it's a low-risk short.
I must be losing my mind. I thought I posted this...
ReplyDeleteENPH- 1/2 off at 4.93-5.
Opening a small short position in EM via RYWYX (Rydex 2x Inverse EM) @ the 1030 window.
ReplyDeleteLong gpro 28.4
ReplyDeleteIn addition to RYWYX, added a small position in RYTPX (Rydex 2x Inverse SPX) @ the 1030 window. We need a 'pause' to launch the year-end rally. The fuel for that decline may well be supplied by this morning's chasers.
ReplyDeleteJAZZ - Reload some on those tails that were occurring.
ReplyDeleteBXE - Yep, I knew $2 wouldn't last more than an hour. $17 coming, lol.
ReplyDeleteLong aapl
ReplyDeleteGILD - Considering this one, looks like bear flag though so maybe I can enter a little lower. Someone call Hillary and ask if she's committed to affordable healthcare or just going through the motions, please.
ReplyDeleteEVA - Woha baby, don't take your eye off the bouncing bio-ball. Anything bio is the shiz......
ReplyDeleteHRTX - Yet another in the space of hijacking healthcare.
ReplyDeleteBought some EROS at $29.47. I actually found this company back in July of last year but never bought it for some unknown reason. They own the largest film production company in India and are building out an online streaming platform for all of their content. They have an activist investor working with them to push this strategy. Here's a good article on them:
ReplyDeletehttp://finance.yahoo.com/news/best-exotic-netflix-ready-india-233004165.html
The valuation is fairly high but if you take into context what they are building with the potential future growth in monthly recurring revenues and the massive amount of content that they own, the valuation is actually reasonable. And given that it has been consolidating here for the past 3 months in the high 20's while the market dropped hard, I think it has held up really well and could make a push much higher. Investors will compare its valuation at $1.6Billion to NFLX at $46 Billion...and think there's plenty more upside.
NWLI - guess it was a coiled spring!
ReplyDeleteFor a stock that doesn't trade much, went from $215 to almost $245 in under 3 days - no news and no rumours I can see. They did reorg to a Delaware company, but that closed Oct 2 and was well know for months. The thought is they may have done this to do acquisitions or maybe some better capital management, but nothing out there. And this is with interest rates looking to stay low.
Anyhow, no complaints.
Sure enough, got that volume spike yesterday and off it flew.
DeleteSGG - Whelp, that ran unnoticed... A higher high, a prize which the GDX can't lay claim. GDX clearly seems to have outperformed GDXJ as well, not meeting the criteria indicative of a PM Renaissance.
ReplyDeleteTBT trend remains unclear, still a bit of guessing required. Trading below the opening price at the moment.
JAZZ - Moving in my favor, must be b/c I neglected to bet the farm.
ReplyDelete"We need a 'pause' to launch the year-end rally. The fuel for that decline may well be supplied by this morning's chasers."
ReplyDelete2nd_ave, after the double bottom in 2011, SPY went up for 4 weeks straight before pulling back to a higher low, which then paved the way for a sustained rally...
Just bought some BIIB at 281.30. I'll see how it plays out last sold it at 316 and it seems like its worth a shot.
ReplyDeleteyesterday was the real buy for bio's if you had the lasso.
DeleteYeah, I mentioned yesterday that shorting down there was lunacy. I read several people commenting on stocktwits about how they were short bios. They finally had the courage to speak up as they were shorting into the hole. Classic trap.
DeleteCome to think of it, I think that mention got me looking.
DeleteYum - Yuk, Kentucky Fried steroidal franken-pigeon? Sort've a slam for biotech from the perspective the birds are a product of genetic engineering.
ReplyDeletei think people have wised up to the deathtraps that are fast food. sure there are still lots of people going there, but if the MCD's etc of the world don't change their menus fast they will slowly die off.
DeleteMCD at 52 week high, yahoo for meatcake.
DeleteCan't put anything past MCD management as they have been able to pivot well over the years. And despite people knowing how bad their food is, the country's population is only getting more obese.
DeleteMCZ - Rock Band 4, whatever that is. This one has doubled and you had plenty of time to accumulate. What are the chances bluechip GE can accomplish anything close?
ReplyDeleteNWLI - What's up with that entire year of lower lows..... Who could endure that kind of action?
Taking ZG off the table.
ReplyDeleteThis phrase (taking it off the table) makes perfect sense given the herky jerky casino nature of this market
DeleteEEM is already above its intraday spike on Sept. 17. SPY has to follow soon. On the day when it does, the last of the disbelievers will jump in, probably causing a massive day rally, which will be a good time to sell before reloading on a small pullback (which usually happens to upset those who jumped in at the "final" confirmation of the correction being over).
ReplyDeleteSPX - Potential 1970 Undercut Before Major 5? extension???
ReplyDeletehttp://stockcharts.com/public/1001240/chartbook/233040110 (Eckert)
Sorry got complaints on link ...
Deletehttp://stockcharts.com/public/1001240/chartbook/233040110
Wonderful. I didn't even realize that I already sold GPRO...at the lows of the day. I averaged down and when it was at $27.6 I put what I thought was an order to sell at $28.6. Turns out I put an order to sell at $27.6. A fat finger trade.
ReplyDeleteCame across this behind the firewall on FT.com:
ReplyDeleteFT Alphaville
| Sep 24 14:30 | Comment | Share
“Hmmm…
That’s a chart of New York-listed Eros International, one of India’s largest film studios and the folks responsible for some of the best dance scenes of the decade, popping 10 per cent yesterday.
And Alphaville’s usually well informed sources think they know why. This is RAW, obviously…
According to said well informed sources, Eros have hired Goldman Sachs to find them a strategic investor who wants to pick up a 20 per cent stake in the company. And we hear they’re pretty close to a deal, with the race primarily between Amazon and a mystery Chinese company.
The idea of a strategic investor is, presumably, to find a body that can help Eros with its ambitions to become the Netflix of India. The Bollywood Netflix, if you will. And it wants to do so before the actual Netflix gets there first, naturally.
Last July, and ahead of the expected 2016 entry into India of its vastly larger competitor, Eros unveiled the latest iteration of its Eros Now service, which offers streaming Bollywood movies, television shows and music to about 19m users. There’s a market which will apparently be worth Rs1.2trn ($19bn) by 2020, according to KPMG, up for grabs.”
if this happens (partnership with Amazon) you will see EROS go to $60 in a month
DeleteLate session numbers mildly encouraging for shorts at best.
ReplyDelete(a) DJIA has pulled back -0.4% from 1030 highs (now +63 points).
(b) EEM (Emerging Markets) + FXI (China 'H' Shares) off -1% from 1030 highs. Better yet, EWZ (Brazil) -2.9% from the highs. It's OK to buy higher in a bull market, a dangerous strategy in a bear market.
(c) Opened a position in GPRO around 28 this morning on a downgrade. This stock has really taken a pounding. Now 28.75.
The market's resilience tells me that a ton of traders missed last week's rally, and are ready to buy any dip. The question is whether the market will continue to reward such behavior.
GPRO (GoPro) closed @ 29.19 (+4%).
ReplyDeleteI hope you're right, David. I only need a minor pullback on Thursday morning.
ReplyDeleteDB-> Just when you thought the worst was over.
ReplyDeletehttp://www.marketwatch.com/story/deutsche-bank-shares-fall-on-large-third-quarter-charges-2015-10-07?siteid=yhoof2
Will be interesting to see how the market reacts to this over the next few days. It s bad news, but if people think all the bad news is out, maybe we can start building a base for a strong move upwards. I still hold DB and think there are a lot of things that can go right, but it seems to be a multi-year story now. So probably have to be patient or just move on.
DeleteAdded to GPRO at 27.80ish. Basis is now 35ish which happens to be MS new PT that started all this mess today.
ReplyDeleteSold a little more ENPH at 5.05 to really get to a 50% position.
Out golfing with my Blackberry friend today and he got an email "meeting at 9:00 AM tomorrow, imperative you attend, at the office, details will be sent out in the morning"
ReplyDeleteBut the catch is his boss who sent him the email is in the middle of a 2 week vacation and lives in the UK and always does meetings by phone.
Pretty obvious what comes next...
Dummer. Maybe too much time golfing?
DeleteMaybe he's getting a raise?
DeleteHe will get a good package at least. Was a direcctor there for 8 years. Prrobably get 6 or 8 months payout. He's been hating it for a couple years now, so probably will end up being good, but still not a nice feeling.
DeleteI have to admit, pretty surprised ENPH got through that little batch of resistance so easily.
ReplyDeleteDB up in Europe and bid in US higher this morning. People seeing the writedowns as getting rid of he problems and setting up for future. No capital raise likely either.
ReplyDelete"NWLI - What's up with that entire year of lower lows..... Who could endure that kind of action?"
ReplyDelete> CP, really depends on your style. Hasn't bothered me at all as I know the underlying company value is going up and at some point this will get reflected in the stock price. But I have no trouble being patient and know my approach gets me good returns over time.
Seth Klarman, who is one of the very best value investors, writes: “Short–term underperformance doesn’t trouble us; indeed, because it is the price that must sometimes be paid for longer-term outperformance.”
AGO LAUNCHED well also, I see. I guess the FED does follow-through with at least a token increase, a positive for these.
DeleteSorry to hear that.
DeleteReopened GPRO @ 28.26.
ReplyDeleteCovering both shorts at the 1030 est trading window.
ReplyDelete(a) RYTPX (Rydex 2x Inverse SPX) was opened at Wednesday's highs. The SPX -0.2% retreated into yesterday's close, and currently off another -0.3%. Expected gain about +1.1%.
(b) RYWYX (Rydex 2x Inverse EM) also opened at Wednesday's highs. EEM retreated -0.3% into yesterday's close, and currently off another -0.55%. Expected gain +1.7%.
(c) Adding to GPRO @ 27.68.
Note that the Shanghai Composite closed up just +3% last night versus an expected +8. Head fake? Maybe. Still bullish heading into year-end.
Looks like I covered just in time.
DeleteAdded to Eros this morning
ReplyDeleteEXAS - Day two... circling the bowl.
ReplyDeleteKirk Spano likely taking a beating, both in terms of his portfolio and his client base, due to EXAS. That's the kind of single stock risk that can destroy a career. I believe EXAS was his largest position as of August, a stock for which he was the loudest cheerleader.
DeleteThe old "back attack" strikes again.
DeleteI don't understand how anyone could take a single stock risk like that in a biotech.
DeleteSeems very foolish - I guess if you get it right, you can use that for marketing your fund for a long time, but no way to seriously run money.
DeleteEspecially in public. To be fair, the guy bought in around $1/share, so he's still way ahead. But anyone who listened to him in the past year (including those who bought on his calls to load up in the low twenties) are not so fortunate.
DeleteLL - Stores carry rare tiger wood, must be high-dollar flooring or a golfer sporting a rocket pocket?
ReplyDeletePACB - This one was a rocket. Not sure what it is, really.
ReplyDeleteCARB - BB's getting tight....
ReplyDeleteONVO - Nice short squeeze.
ReplyDeleteGPRO closed at 27.40 for a minor loss. Tight stop, no questions asked.
ReplyDeleteCECE - Beat up pretty good considering they make industrial pollution control devices mandated by EPA.
ReplyDeleteFCAU back above $15 and Ferrari coming out soon. Actually, sentiment on all the auto makers is better and they've all had good runs. Think people realize that trouble for VW means more sales for the rest, kind of like when JC Penny had their trouble and all the other retailers did well.
ReplyDeleteMight be time for FCAU to make it's run for $20
Perfect knockout play too, I came close to jumping in around $12 but was preoccupied by unrelated nonsensical stuff.
DeleteI regret not having the guts to buy at $12. Stared at it all day that day but chose "safer" picks like WMT / QCOM / IBM.
DeleteEYES - Talk about circling the crapper... See BB's were tight, predicting a move.
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=EYES&p=W&b=5&g=0&id=p76114146156
Damn I feel like I sold ZG too early.
ReplyDeleteI've been walking around with the same sentiment the past two days!
DeleteBeen thinking about energy stocks and they've had a nice move off the bottom, but still down a lot, especially the small caps. Been trying to decide whether to buy some, but keep thinking every quick bounce like this almost always has a pullback, so they should get cheaper. Also, we may see a bunch of selling into year end as part of tax loss selling as a lot of people will have losses in these.
ReplyDeleteMight be wrong, but the more I think about it the more I like the idea of waiting a couple months and see how things shake out and how the supply/demand stats come out and, if things still look good, picking up some into year end.
If they do continue to ramp up, I still have some exposure, so not the end of the world.
I'm still thinking we see low oil for a while. Seems to me that it will follow Nat in being low for a while due to huge supply from better drilling methods.
DeleteI honestly have no basis for this opinion, just thinking about it more in terms of sentiment. I think we had a massive bubble for a decade or so and that it takes time to work off the excesses
That's another reason I'm holding off. Big bears generally follow big bulls, so it may be a lot longer and i'm hoping to see clearer fundamental data in the next couple months.
DeleteI kind of started changing my opinion on biotechs a few days ago and still feel this way. I was focusing a lot of the move from the 2009 low but in all reality, biotechs didn't do much for about a decade. instead, i should be comparing the move from the 2011 breakout to the move in the Nasdaq from 1993 or so. that is why i said the other day that I don't think it's wise to short em down here. maybe there's a little more downside...maybe a false breakdown...but I would be looking to pick up beaten down biotechs here instead of trying to short them.
ReplyDeleteSo if biotechs are similar to the dot com / nasdaq bubble, this very well could only be 4 years into the bubble. and the nasdaq bubble didn't really start until 1993/1994. the better way to look at them is maybe this is their 1998. a sharp pullback before melting up. i doubt that happens here because of increased govt scrutiny on them as a whole. ideally, the best thing is for them to consolidate over a period of 6-12 months but the froth could coming roaring right back in.
Deletei like SCMP, AMAG for small caps and AMGN for larger caps. I think GILD is probably a good one too but too much emphasis on one drug for its revs so its a little riskier than AMGN
Is the late day spike up in SPY and spike down im VIX going to be all we get for clearing the intraday highs of Sept 17? I don't think so. Many investors will look at the closing price tonight, breath a sign of relief, and will put in a buy order for tomorrow. If we do get a large rally tomorrow, without this cautious stuff of mid-day pullback getting bought just enough to go green at the end, then it would be a good chance to unload short term positions.
ReplyDeleteSVXY hit my sell limit order at 56 today for the shares I purchased at 53. That was my last bunch. Now will start selling VXX puts. Will sell some tomorrow if we get a large up day.
ReplyDeleteOn the other hand, the VIX futures have just entered a proper contango structure today, so the longer I hold on to VXX puts, the more it should melt away...
ReplyDeleteDavid,
DeleteAre you selling Puts you own or naked Puts?
Here is a chart of SPY around the 2011 crisis:
ReplyDeletehttp://finance.yahoo.com/echarts?s=SPY+Interactive#{"customRangeStart":1309503600,"customRangeEnd":1325318400,"range":"custom","allowChartStacking":true}
we seem to be following the same script. If so, then we should expect a few more days of oscillation around 200, and then when all impatient traders sell for a small profit, SPY should move up about 50% of the distance between double bottom lows and September high, getting to about 205, as 2nd_ave had predicted. At that point, it should pause for some time and then pull back to a higher low. Let's see if this script works out.
Mike, I understand your market analogy between Biotechs and Nasdaq. Another way to look at it is the Nasdaq p/e was around 30 in 1998 and didn't get the outrageous 100+ p/e's until the final move upward in 1999/2000. IBB already has the 100 p/e's, so that could indicate we've had the final push. Even the momo traders know you can only push valuation so far.
ReplyDeleteAway most of the day, but given the opportunity I would have reopened shorts in EM + SPX at today's close. Bullish over the next few months, but turning bearish over the next few days.
ReplyDeleteAnyone want to guess what stock has the symbol FRRI?
ReplyDeleteFujitsu?
DeleteFR-R-I
DeleteNew symbol for Ferrari. Ipo going well and price bumped to give a valuation another billion higher.
Yeah, I was kidding... Regret not jumping back in at $12, that was an obvious entry. Notice as well, FCAU didn't waver at the UAW threat.
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