This one’s made in China!
Since exiting Emerging Markets on October 28, the sector has declined
and rallied back:
(a)
The quick turnaround tells me we’ve
probably seen selling exhaustion. Bulls
are in control.
(b)
Oil prices + energy stocks appear to have
printed a major bottom. Emerging markets
are closely correlated with both.
(c)
US indexes appear headed to new highs(!), adding
to the tailwind for higher-risk assets.
Brazil and South Korea seem overextended here, so my strategy will be to
focus on China.
(a)
Reopened CAF (China ‘A’ Shares) @ 24.90,
exactly where I closed the position last Wednesday.
(b)
Opening a position in FXI (China ‘H’
Shares) @ 38.76, last Wednesday’s closing price.
(c)
Will reopen a position in VEIEX (Vanguard
Emerging Markets) at the close.
Advantages of VEIEX over FEMKX (Fidelity Emerging Markets) are a
relatively low exposure to Brazil (6.84%) + zero exposure to South Korea. I last exited VEIEX October 28 @ 22.58. The fund closed last night @ 22.40, and based
on today’s move in VWO/EEM I hope to reestablish a position within a percentage
point of 22.58.
Based purely on the unrelenting rally in US stocks, I suspect it will be
difficult to time entries into any year-end rally. With that in mind, I’m opting for a ‘La-Z-Boy’
approach through early 2016.
Yep, entering emerging markets on a pullback has been difficult. I am still stuck with my initial position in LZEMX (opened a few weeks ago at $14.21) for 1/2 of my 401K. Was waiting to put the other 1/2 into it on a decent pullback, but no such pullback has occurred...
ReplyDeleteI've been trying to be too slick, catching every twist and turn. Had I just hung onto all positions listed in the 'The BABA Put,' I'd be relaxed and content.
DeleteMy one consolation is reopening VEIEX (Vanguard Emerging Markets) more or less where I left off, as it closed today @ 22.65-> just 0.31% above my 10/28/15 exit.
And what's up with such a low volatility in EROS today??? My "automatic" trading strategy cannot make any money if it is staying in place...
ReplyDeleteEROS, assuming it's not a fraudulent company, needs a few days of low volatility to build a base.
DeleteDavid-
DeleteWhen I was your age, I took a few AUMN-like hits which took me out of the game for awhile.
The reality is that most traders suffer serious drawdowns early on. The ones able to recover and continue have a high probability of succeeding. Let's call the former a rite of passage, a universal experience that cannot be avoided. The pain must be debilitating, the 'real deal.' The latter is a test of character, and determines how much playing time the market will assign us.
Yes, I did learn a few lessons from that disaster. The most important lesson, I suppose, is that things could turn sour even when there are many good reasons for them not to. And this can happen on ANY time scale -- from a temporary collapse of a small stock to a multi-year shift in attitude toward US growing debt level, inflation, and gold. In short, I learned that in any trade, there is always a decent chance that I will be wrong in taking it.
DeleteImplication number 1: never borrow money for investing.
Implication number 2: listen to my wife when she says that she wants me to put 50K into her own account, from which I will not be able to take money for trading.
My progress in 1: I haven't used margin (or credit cards!) for two years now, even when I was fully invested. I was just waiting for new money to come in from my job, which I could then invest. I haven't been trading for two years because I gave priority to paying off my credit card debts, which I did last Spring. Then, during the summer, I had some Oracle stock vested, which finally gave me some chips to play with in a debt-free environment.
My progress in 2: I am strongly determined to give my wife a birthday present of a $15K check as soon as I close my VXX puts. We've been receiving offers from Chase, that if we open a new checking account, put $15K there and keep it there for 90 days (and also set up some direct deposit there), then they'll give us $500. This is roughly a 14% return annualized, which is pretty good. So this is an extra motivation for me to stash away $15K into safety, so that our family does not go broke again due to my poor trading...
Good work David in getting it all paid off. Must have been tough.
DeleteAnd you are correct that we can do all the work possible, but still be wrong or have something happen which makes us wrong on that purchase. You always have to allow for that and either have a plan to get out with minimal losses or diversify risks or something to ensure it is not financially fatal.
The biggest lesson I learned from the gold/silver disaster was that attachment to any thoughts/ideas only brings sorrow. This finally allowed me to decide that I am tired of living in my old identity -- that of a man separate from the world. It is much nicer to view life as phenomena arising and passing, every moment, inside Consciousness, which is the only REAL thing that is present (it is not actually a *thing* -- its only quality is the capability of observation). But then, all other phenomena are dead without Consciousness observing them, so it is only Consciousness that lives life. And since all phenomena inside consciousness change so frequently, it is easy to see that they are not independent *things* either -- they are just imprints in Consciousness itself. So then we have Consciousness observing itself in different manifestations. Or God observing itself and manifesting as everything else. This is a fully self-consistent view of life, and anyone who is tired of living in a small and separate identity can choose it. And then the experience of life totally changes. All the worries are gone, because "good" or "bad" are just labels that the mind assigns to situations, but Consciousness just quietly observes this labeling activity, being fully content with whatever phenomena are arising -- it is still observing itself, no matter what is happening...
DeleteInteresting thoughts david...the essence of Buddhism. I began my own deep spiritual journey 4 months ago and not too ironically I ended up having the worst stretch of investing I've had in a while. Definitely not a coincidence and in my opinion it's the universe / God speaking to me, telling me there's more to life than just money and material things. And perhaps him telling me not all people are as blessed as I am to not have to work and get to getting a job!
DeleteDavid, the nice thing is that you drew lessons from the experience and sought ways to improve going forward, that in my mind is the essence of success.
DeleteThe notion of living in the present moment is something which is powerful and I try to do this. I also find that it makes life less stressful and happier.
Hope you're right 2nd. I bought YINN today. I haven't heard a single person say Shanghai gets back up to 5,000 again within 6 to 12 months.
ReplyDeleteI guarantee it.
DeleteAnd right on cue, Shanghai currently +1.79%, and the Hang (Seng) Higher +2.92%! If US indexes can reclaim YTD highs, why not Shanghai? That would make it a +50% gain from here.
DeleteIf Shanghai gets back to highs YINN would be back to $55. Would be nearly impossible to hold all the way
DeleteMike, I like YINN chart. I'll enter it tomorrow and place a stop below the recent low at $21.71.
DeleteCanada's view on your US election from the Globe (a slight right of center paper):
ReplyDeletehttp://www.theglobeandmail.com/news/politics/bernie-sanders-ben-carsonhave-us-voters-lost-touch-with-reality/article27072221/
They think "Hillary Clinton remains the closest thing to a sane person who might become the next president."
EROS
ReplyDeletehttp://www.streetinsider.com/Corporate+News/Eros+Intl+%28EROS%29+Issues+Detailed+Response+to+Recent+Short-Seller+Allegations/11022811.html
ENPH reported in AH
ReplyDeleteI almost bought ing yesterday. Very tempted on some of those European financials. Been stalking a spot on db
ReplyDeleteI think we get to $20 on ING in the next couple years. Earnings are good, dividends are committed to 40% of earnings, capital ratios are good, ROE above 10%. Should drive a higher book value and higher p/b.
DeleteENPH- I actually listened to the CC yesterday. Honestly is sounded horrible. Not so much the numbers but the whole 'everyone is on board to tighten our belts' thing. So weak. This will probably wipe out all of my trading gains in this sucker so that sucks. I wouldn't do anything until I can find out more. Will be interesting to see SEDG earnings.
ReplyDeleteGRPN - Smackdown.
ReplyDeleteENPH- Maybe if we see $2 on 4M shares plus might be interesting.
ReplyDeleteENPH - I'm not sure I wanna buy, tighten belts b/c solar isn't cheap enough to compete or utility scale solar is wining over rooftop? AEIS is selling their inverter division (announced months ago).
ReplyDeleteENOC isn't doing well either, where are these ideas coming from?
What's ENOC? Let's see how SEDG does. Maybe the lose of the ITC is also getting priced in here.
DeleteSEDG down 10% in sympathy. I thought they would have reported this am but I guess not.
DeleteAMC today. Kinda strange for an Israeli company.
DeleteDalian Wanda parent is Chinese, looks like.
DeleteI think a lot of people that missed the rally are going to chase AAPL into year end. if i had guts i would buy call options on that
ReplyDeleteGM should be recalling vehicles from the early 2000's for faulty brake lines. I've replaced all the rear rusted out lines that pop on one Buick we have (approaching 270k miles, still runs and drives like a top).
ReplyDeleteAINV - Reports in the morning.... Gonna watch that reaction out of curiosity.
ReplyDeletePlaced a buy stop order for YINN at 23.50...
ReplyDeleteI meant to say I sold my YINN this morning at $33.7. I've seen these pops fade too many times this year to not take it. Having said that I'm still bullish on this. I need to look closer at how the S&P rallied out of the 1987 crash because I think the action in Shanghai was similar in a lot of ways so looking at this from a sentiment and support / resistance perspective is smart.
DeleteI ended up hopping back into YINN and bought BABA. I know this is dumb to buy after the run in BABA and its also probably stupid to base my decision off of, but I have been working hard building up my own business and part of it will be importing products. I can't tell you how many people I know or have followed that are using BABA to import products. It is spreading like wild fire over here. BABA isn't a holding of FXI but I think it's impact on the Chinese economy will be massive. I wish I had really gotten into this business a few months ago because I would have been aggressively buying BABA down in the $60's.
ReplyDeleteI'm keeping a lot of room on YINN to add due to the risk.
DeleteThe downward momentum seems to have faded in YINN. Now, with some probability, it can make a U shape intraday and rally into the close, with follow on rallies for the rest of the week. I just lowered my buy stop order to $23.30.
ReplyDeleteTake a close look at how the S&P came up out of the 1987 lows...not sure if this link will come through. but i would expect a herky jerky move higher and then a breakout 6 months or so down the road...after people have finally given up on the notion that China is going to crash.
Deletehttp://finance.yahoo.com/echarts?s=^GSPC+Interactive#{%22showArea%22:false,%22customRangeStart%22:536486400,%22customRangeEnd%22:623055600,%22showLine%22:false,%22showOhlc%22:true,%22showSma%22:true,%22smaColors%22:%22#cc0000,#009999%22,%22smaPeriods%22:%2250,200%22,%22smaWidths%22:%221,1%22,%22smaGhosting%22:%220,0%22,%22lineType%22:%22bar%22,%22range%22:%22custom%22,%22allowChartStacking%22:true}
I do think moves tend to get compounded faster nowadays, though, maybe due to the short term nature of the market nowadays...so I would think the 1987-1989 analog just gets compressed and it plays out over say 6-9 months.
DeleteBut then, the 5-year chart of FXI could just as well resolve itself by a return to $34 and then a move below it to the 2008 lows... I've seen plenty of charts like that as well. If I could see the relative short/long position of speculators in FXI, then that info could bias my view as to which way the chart is more likely to resolve itself (if everyone and his brother is short China, then the selling pressure is almost over already). Have you seen some web sites that try to quantify the long vs short positions in Chinese market?
DeleteNo just anecdotally I think most people are scared of China, which means it trends higher.
DeleteLong VRX after hours at $91.7. Small position.
ReplyDeletePSEC reported, didn't crash.
ReplyDeleteThe Shanghai Composite rallied +4.31% Tuesday night, spurred by talk (premature, as it happens) of a Shenzhen-HK Connect (similar to the Shanghai-HK Connect already in place). It's just a matter of time, IMO.
ReplyDelete(a) EEM (MSCI Emerging Markets) -0.8%.
(b) VEIEX (Vanguard Emerging Markets), however, closed up +0.31% to 22.72. Why the disparity? VEIEX has minimal exposure to Brazil, and no exposure to South Korea (both suffered significant declines today). One reason I selected Vanguard for this round.
(c) Reopened a position in PBR (Petrobras) on today's decline.
I just want to point out that China will one day become hands down the largest player (at least based on market capitalization) in the global stock market.
ReplyDeleteLet's pretend it's 2020, and we're reminiscing about 2015. Do you want to be the guy who scorned an entry into CAF or FXI because a -40% decline in 2015 just wasn't 'good enough?' This may be the equivalent of TCK @ $3 in 2008, on its way to $60 in 2010.
I don't know. I wouldn't feel comfortable putting and oversized position in China stocks. You've still got the issue that the are a communist country and there are not a lot of protections for investors. I think they are working their way towards this, but there will be a lot of fits and starts along the way as the Communist Party won't want to give up their current levels of control.
DeleteHedged my ENPH with a position in SEDG at the close. 17.17 I think. Earnings seem good but we've seen this before.
ReplyDeleteGood job, not sure what made you think of that but very nice! :)
DeleteI don't usually recommend a film twice, but I'll do it now. 'Ink and Steel.' If you have to, just pay the $4.99 7-day rental fee (Amazon streaming). You won't be disappointed.
ReplyDeleteShanghaier +2.24%. Hang higher +0.44%.
ReplyDeleteLooking good
DeletePlaced a buy stop limit on YINN at $23.50/$24.
ReplyDeleteShanghaier +1.83% overnight.
ReplyDeleteReopening FCX (Freeport McMoran) on a -1.25% premarket decline (on top of -3.14% decline yesterday) @ 11.88. Oil, commodities, energy, miners, and emerging markets all poised to rally IMO.
SEDG off at 20.20. Will revisit.
ReplyDeleteVRX - Wow, more gifting...
ReplyDeletewow. i closed it pre market for a $150 gain. dodged a bullet...although i had almost nothing on it.
DeleteSeems like Ackman's clients are requesting their capital returned?
DeleteSomebody lives in outer space, apparently?
ReplyDeleteFireEye Inc.: Stock attractive; addressing large and growing markets
October 07, 2015
FireEye Inc.: Downgrading to Neutral on growth deceleration
November 05, 2015 06:06 AM ET
ENPH - I just don't believe this, incredible.
ReplyDeleteFB - Worth more than GE, so buy, buy, buy! AMZN should be worth more, assuming internet sales tax never materializes.
ReplyDeletePAH - I guess Ackman owns this too, looks like some customers want what remains of their capital back.
ReplyDeleteENOC - Speaking of the Devil... Enochian Magic.
ReplyDeleteTWO - Coming to me. Wonder what S2 monthly might be?
ReplyDeleteWMT - Reminds me of MCD, wonder if the bottom is in?
ReplyDeleteEVA - Reported and didn't crash... Can't say that much for many others.
ReplyDeleteFNMA - Paying $2B to US Treasury, how long does it take to blow through that? How much bailout did FNMA receive?
ReplyDeleteMan the blue chips that are out of favor right now sure look cheap on the surface, stocks like QCOM and WMT. I wonder when the time is to buy these things. I remember clearly how beaten down MCD got a decade or so ago. Gotta wonder that this mega cap tech run fades out and these rotate.
ReplyDeleteI think it's so important to wait for a new uptrend to develop. I got hit on a few stocks this year, particularly MMYT and BITA, buying during the downtrend. This is a very very dangerous strategy because you never know how low it can go. If I look closely at how MCD bottomed in 2003, I could have waited for a move above the 50 DMA or even the 200 DMA and then it would still have gone up significantly even if I didn't buy it at the lows. I also think waiting for a waterfall type move like MCD in 2002/3 is important because that is usually a sign of panic selling. When you have a waterfall type move lower like MCD did back then, buying above the 50 DMA probably makes more sense than when a stock slowly trends lower and buying above the 50 DMA as its likely in the latter scenario that you get stopped out.
DeleteSo do you think fxi has already started to trend up? Is it above its 50 day MA?
DeleteWMT owned since 61, but mkt seems to like AMZN and FB.
DeleteI do. I think it's wise to carefully pick your spots though. Try to get in at points that are very low risk-reward
DeleteFXI chart really looks decent, and 2nd's comment about looking forward to 2020 and saying wow how did we miss this opportunity has validity.
Delete52.85/32.80 .50 equals 42.83 so that's a possible ST target here, but still already 20% off bottom.
Basically the way the mkt's moves nowadays makes no sense to me and I tend not to try to understand it anymore just deal with it. However, these large moves up/down have me preferring not to play and just enjoy life so I'm doing alot less in the mkt and do not profess to have any great insights. FWIW
QCOM - I look at this one and try to imagine what they have to offer. As far as I know, it's a WIFI chip which maybe isn't exactly rocket science and might be integrated into the CPU anyway, as devices get shrunk?
DeleteI dunno of course, maybe QCOM WIFI chips are the hot thing and Wall Street is playing games...
Just thinking out loud.
OT:
ReplyDeleteMark is that you playing with your new GoPro and JetPack?
http://www.foxnews.com/tech/2015/11/05/stunning-video-shows-jetmen-flying-in-formation-with-emirates-a380.html
goto
Deletehttps://www.youtube.com/watch?v=_VPvKl6ezyc
Is it me or is TBT looking really good here?
ReplyDeleteMy buy stop order for YINN was triggered this morning at 23.56. Placed a sell stop for it at yesterday's lows, at 23.00
ReplyDeleteOpened a position in TBT today at 44.89
ReplyDeleteI actually forgot the jobs report is tomorrow so I closed it out.
DeleteRe the large caps, the market does seem to be really liking the AMZN's and FB's, but I think they are becoming momo stocks and going up because they are working and not because they make a lot of financial sense. They are both $300+ billion market caps, so if you take a long term view, say 10 year, you'd need to see them with $1.2 trillion market caps in 10 years (14% a year return). Really hard to see considering AAPL is the largest company in the world with a little more than half of that.
ReplyDeleteI do like the the analogy of MCD. That stock got very cheap in 2003, then the business did some things right and it took off. Could see the same in a lot of the beaten down large caps in the next year or 2.
I think the important thing to do now, given the stocks are in free fall and they appear "cheap" is to just look for technical signals at this point to buy. I'm using my setup for MCD as an example.
DeleteYIN/YANG
ReplyDeleteRL/NEM
T3d -- speaking about living in the moment, it is really hard to do it consistently if you still view yourself to be a separate person, since that person will always have to defend himself against life and hence cannot ignore the future. However, once you examine everything that you can become aware of and realize that NOTHING among that can be YOU, then you realize that you must be THAT, which examines -- pure Awareness, without any properties, and hence without any possibility of changing over time. THEN you can relax and live in the moment.
ReplyDeleteHere is a link to the book "I am THAT" by a great Indian sage Nisargadatta Maharaj: http://www.anandavala.info/miscl/I_Am_That.pdf
The quote on the title page is sufficient for Awakening. Here it is:
"The seeker is he who is in search of himself. Give up all questions except one: ‘Who am I?’ After all, the only fact you are sure of is that you are. The ‘I am’ is certain. The ‘I am this’ is not. Struggle to find out what you are in reality. To know what you are, you must first investigate and know what you are not. Discover all that you are not -- body, feelings thoughts, time, space, this or that -- nothing, concrete or abstract, which you perceive can be you. The very act of perceiving shows that you are not what you perceive. The clearer you understand on the level of mind you can be described in negative terms only, the quicker will you come to the end of your search and realise that you are the limitless being."
Thanks David!
DeleteIt is definitely a work in progress that's not achieved enough by myself, just when I do I seem more at peace and happier.
Thanks again.
Phyllis and I saw The Martian this afternoon and it is much better than expected. Besides I enjoy Matt Damon as an actor.
ReplyDeleteAnother one that might potentially be going through a transition from long term bear to bull is TWTR. I ended up buying some today at the close primarily because the spot here is manageable. A move lower by $1 would get me out of the position.
ReplyDeleteI still think from a fundamental perspective, this company is completely foolish to waste their resources on things that don't bring in profits when they have one of the largest potential revenue streams in the world at their finger tips: ad words revenues similar to Google. If they cleaned up their search results page to make it similar to Google and refocus their company on being the world's best real time search engine, I think the stock would go up 5x from where it is right now.
TTM - Up 40% from recent lows, how much is FCAU up?
ReplyDeleteOn a 1 year basis, FCAU is up 30% while TTM is down 35%.
DeleteReally hard to catch these bounces from a downtrend like TTM , so wouldn't get too hung up on missing things like this.
Yep, and prices don't grow to the moon.
DeleteDUST - Is the employment report already priced?
ReplyDeleteEYES - Another super turd, still crashing.
ReplyDeleteBanks ripping
ReplyDeleteAnd how, SIVB killing it.
DeleteSEDG- Unreal action with those number yesterday.
ReplyDeleteTele- That was last weekend. Good times :)
ReplyDeleteFor players only.....
ReplyDeleteS2 for SEDG is 18.50.
WING is one to keep an eye on. Anytime I see a 17% increase in revs result in a 60% increase in profits I'm interested. Massive leverage in their business model. Not sure what is a good price though. Just need to wait for a base to form I guess.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteTWO - Given the current reaction to what should be good news but isn't, I'm not making any decisions early today.
ReplyDeleteEarly reaction to 'jobs' has been mixed. Bonds selling off hard. $USD up. Emerging markets + commodities down.
ReplyDelete(a) GDX (miners) off another -4% looks like a good entry to me. Now long @ 13.49.
(b) EEM is off -2.5%, no doubt burdened by a -4.35% pullback in EWZ (Brazil). If you're not already long EM, today is a buying opp.
(c) Shanghaier again overnight +1.91%, and both BABA (Alibaba) and CAF (China 'A' Shares) are in the green.
One advantage of the La-Z-Boy is time away from the markets. Short-term movements become 'noise,' and we can let the players sort things out!
Just went through and cleaned up my twitter feed. Got rid of a lot of people who I was just following to get notified of blog posts and put these into feedly instead. Think will be a real productivity booster. I was getting probably 300 tweets a day - hope to get this down to under 50.
ReplyDeleteObama rejected the Keystone Pipeline - big news up here and just seems like a political, short-sighted decision. Wasn't that long ago the gas stations were closed Americans were lined up for hours for gas. Plus, oil that isn't coming from Canada will be coming from the middle east or Venezuela - both choices bad.
ReplyDeleteThat's weird -- Shanghai moved up overnight, but FXI gapped down at the open... Are traders expecting Shanghai to react negatively on Monday to today's jobs report? I got stopped out of my YINN position at $22.50. Now its chart is not looking all that great -- will think about re-entering if FXI/YINN rise above the yesterday's highs. In fact, I placed a buy stop order on YINN at $24/$24.25.
ReplyDeleteASHR
DeleteI don't worry too much about the disparity between 'H' shares and 'A' shares. Over time, we'll see spectacular gains in both.
DeleteBought some DB and SAVE today.
ReplyDeleteI agree about Keystone, poor decision to reject this.
ReplyDelete(a) The DJIA reversed an early -94-point plunge to finish +47 points. Starting to sound familiar?
ReplyDelete(b) EEM recouped almost half of its early morning decline to close -1.47%. EWZ (Brazil) did even better, erasing 70% of its morning decline.
(c) GDX (miners) struggled all day, but held around my opening basis.
(d) The Shanghai Composite rallied another +1.91% overnight. FXI (China 'H' Shares) dropped -0.92%, offset by a +0.67% gain in CAF (China 'A' Shares).
(e) PBR (Petrobras) + FCX (Freeport McMoran) continued their declines. The La-Z-Boy approach to high-beta stocks can resemble a roller-coaster!
(f) VEIEX (Vanguard Emerging Markets) gave back -1.06%.
I continue to think markets are consolidating recent gains, and that the bulls are in control.
We've all seen the pattern where an expected market move fails initially to materialize, only to kick in with a vengeance down the road (long after disappointed traders have hit the showers). This scenario unfolded beautifully following last year's debut of the Shanghai-HK Connect.
DeleteCP - I'm surprised this one didn't respond favorably to today's Keystone decision, perhaps it's still too expensive?
ReplyDeleteoil and gas stocks look like they may have bottomed. I'm interested now. Been looking at:
ReplyDeleteBCEI
BTE
AREX
LNCO
MEMP
ARP
WTI
HLX
DNR
SDRL
My only concern is I think there's a chance there isn't a bottom in energy until next year. Seasonally energy performs well starting late Jan
DeleteIf they have bottomed, there should be good upside will be in the small caps - take a look at http://finance.yahoo.com/echarts?s=PSCE+Interactive#{"range":"10y","allowChartStacking":true}
DeleteDown from $55 to $19 in a year and a half.
Problem is if we haven't bottomed, they are the ones most at risk.
Shanghai is up again, despite Friday's jump in $USD following a strong US jobs report. This is encouraging. Placed a buy stop limit order on YINN at $23.30/$23.50.
ReplyDeleteMike, thank you for the list of oil and gas stocks! We don't have to guess whether or not they have bottomed. We can choose those that recently made a higher low and place a stop at that low, if they soon make a higher high. I recall Alexander Elder saying that an obvious exit place is a requirement for a good trade. I found easy stops for the following stocks: BTE, WTI, SDRL, HLX. If those stocks soon rise above last week's highs, then we can place stops at Friday's intraday lows, and the trade will be good to go...
ReplyDeleteHLX is about to break out above last week's highs, so I just placed a buy stop limit order on it at $6.60/$6.70.
DeleteSmall speculators keep piling their shorts on SPY, while commercial traders keep taking the opposite side of the trade, increasing their longs:
ReplyDeletehttp://www.barchart.com/chart.php?sym=ESZ15&style=technical&template=&p=DN&d=X&sd=&ed=&size=M&log=0&t=BAR&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=150&indicators=COTLC%2813369344%2C26112%2C153%29%3BCOTDLC%2813369344%2C26112%2C153%2C16750848%29&chartindicator_3_code=COTLC&chartindicator_3_param_0=13369344&chartindicator_3_param_1=26112&chartindicator_3_param_2=153&chartindicator_4_code=COTDLC&chartindicator_4_param_0=13369344&chartindicator_4_param_1=26112&chartindicator_4_param_2=153&chartindicator_4_param_3=16750848&addindicator=&submitted=1&fpage=&txtDate=#jump
I'd be surprised if SPY does not break out to all time highs soon...
If you overlay 6 month charts for USO and FXI, you'll notice a pretty decent correlation, which is easy to explain fundamentally. So if you think that China has bottomed, then it makes sense to be bullish on oil stocks as well...
ReplyDeleteWY at 29.00.
ReplyDeleteMS downgrades X now. Where where they at 40 when overweight?
ReplyDeleteThinking about SEDG on the gap fill here. Not sure though as it seems very strange to be trading so poorly after another really solid earnings report.
ReplyDeleteBidding 18.72.
DeleteOK
Delete...and 18.52.
DeleteMy foray into energy did not start off well -- my buy stop limit on HLX was triggered this morning. Placed a sell stop limit on it at $6/$5.90.
ReplyDeleteMy initial position in HLX was quite small, so I just doubled down on it at $6.31. It appears to have bottomed intraday and now it is pretty close to my stop at $6, so the possible loss on this second purchase is almost negligible.
ReplyDeleteDespite oil being down today, out of the 4 oil stocks I identified as having a good chart pattern, two are up today (BTE and WTI). This is encouraging, as it suggests that these stocks were priced for death...
ReplyDeleteAlso, picked up some BTE just now at $4.65 -- it had disappointing earnings on Friday, below expectations, and today it is surging up despite a drop in the oil price. Once again, this suggests that investors are now looking "across the valley", to the hills on the other side.
ReplyDeletePlaced a sell stop limit on BTE at today's open: $4.40/$4.30.
DeleteThe disconnect between Shangai and FXI continues -- Shangai keeps making new highs, while FXI dropped today below its last week's lows at $38.30. Don't know what to make of it...
ReplyDeleteAs tof pointed out earlier, ASHR (or CAF) are ETFs that aim to track the Composite.
DeleteThose investors who were not dead set on holding SPY for a long time probably exited today. I would, if I had not known about all speculators being on the same "short" side of the SPY boat...
ReplyDeleteEVEP - Surprise!
ReplyDeleteTo top off my today's entries into energy, I just picked up some WTI, since it broke up today above last week's highs.
ReplyDeleteCP to buy NSC, eh?
ReplyDeleteGot balls? Buy SUNE into report AH.
ReplyDeleteGot balls? Buy EROS now -- it is reporting on Wednesday...
ReplyDeleteLooks like it was an ugly day all 'round. Ironic that the Shanghai Composite closed up another +1.58%, and is now officially in bull market territory (up well over +20% from the August lows).
ReplyDeleteWell, some energy stocks were up despite the oil price and SPY being down, which suggests that they were pricing in something VERY bad...
DeleteSWC - The Volkswagen dilemma must already be resolved, eh?
ReplyDeletePEIX - Ouch.
ReplyDeleteNWPX reported a few days ago, looks like they're losing money at this point.
ReplyDeleteEROS, FWIW
ReplyDeleteWe are short Eros with a target price of ZERO.
http://seekingalpha.com/article/3671166-eros-return-of-the-short-seller-2015
May as well go to zero, along with BXE and most other publicly traded companies.
DeleteAGO
ReplyDeletehttp://seekingalpha.com/article/3666856-assured-guaranty-50-percent-of-growing-adjusted-book-value
Very positive article - understands the bull case well. Still one of my largest holdings.
DeleteENPH - Wonder if these guys are among the millions of companies hiring?
ReplyDeleteBID - Another one going to ZERO
ReplyDeleteI decided to give some more room to my oil stocks and moved down my stop on BTE to $4.20 and on HLX to $5.50, so as not to get faked out by some gap down and an immediate rally.
ReplyDeleteThe third oil company I purchased yesterday, WTI, is moving in the right direction today. Take a look at its 6-month chart -- a clear bowl formation, with the right side being built now. A beauty of a chart...
ReplyDeleteINXX - Well, so much for India's infrastructure. We need a flurry od bullish articles, apparently.
ReplyDeleteRBY - You can't buy this one without moving it a full penny (+8%)
(a) Solid hammer in Brazil's iBovespa, which reversed an intraday decline of -1.7% to close green. EWZ itself +2.23%.
ReplyDelete(b) FXI (China 'H' shares) -0.77%, offset by a gain in CAF (China 'A' Shares) +2.28%.
(c) EEM (emerging markets) slides another -0.4%.
(d) DJIA and SPX both reverse opening declines to trade green. NDQ remains red.
50% of properties bought in DC last month sold in 12 days.
ReplyDeleteW - My broker has a buy on this.
FNMA - BB's are really tight...
ReplyDeleteDamn I'm shocked at some of these price drops. GPRO got annihilated. SEDG, SUNE, ENPH, ENOC....just, wow.
ReplyDeleteAmazing destruction of commodities, Ngas, Oil, steel, miners, coal, iron ore, shippers, solar, and casino's. It leaves you speechless as to its obliteration.
Deletemy largest position is BAC...just wondering when that gets crushed.
DeleteBAC is good - cheap stock and I'm pretty sure the market is in the process of transitioning from liking the expensive, growthy stocks to cheap stocks like this. I think you still need to stay far away from the high-fliers of the last year like FB, PCLN, IBB, GPRO, AMZN, etc.
DeleteThe market reminds me of the 2000 - 2002 period where a lot of the big name S&P 500 and tech stocks were getting crushed, but underneath this, the cheap stocks were starting to outperform. I can't recall the exact figures, but value outperformed growth by something like 75% over that period.
Commodities have also been trashed, and while it is hard to know if they have bottomed, they are closer to the bottom than the top for sure.
Bought some EEM on close for a trade.
ReplyDeleteIMAX - Beating EROS by a long shot. Wondering why we (me) don't own IMAX instead?
ReplyDeleteNice numbers out of GIB again today with a beat on revenue and earnings.
ReplyDeleteI think they are a good long term technology player, reasonably valued and not tied to a specific solution. Better than an IBM because they still can grow.
EROS - Thought earnings were to be announced today? If I'm right, it's surprising the stock isn't down another 50% Feel like I'm out of touch on this one.
ReplyDeleteEROS -> TWO Okay, took the loss before it gets even larger and rolled that into TWO
ReplyDeleteMacy's down 12%, this was for a long time the cornerstone of Tyson's Corner shopping center. The place used to be packed during the holiday season, you couldn't get in. This was BEFORE the UNTAXED internet commerce became the way to shop (AMZN), plain as the face on your nose.
ReplyDeleteSomething has to give. With more and more commerce going over the web, the tax process has to be changed to recognize this.
DeleteIn Canada, unless you are very small (under $30K revenue), you are required to charge the tax for the province of the customer.
Simple, but the US government is so dysfunctional these days, nothing seems to get done.
Got back into YINN today at $21.3
ReplyDeleteNo fresh ideas here, such as lumber for instance. If you believe in housing demand surely you'd anticipate green habitat should be harvested. Not from the protected Amazon though, that's too important to special interest groups holding the green land leases.
ReplyDeletePGAL - I love hearing why this one was crushed AFTER the event occurs, precious!
ReplyDeleteBABA - Ma needs to make up a few more of these holidays, an addictive shot in the arm for sales. I guess the insiders knew about it before the event thus they can sell into strength.
ReplyDeleteThe reminiscences guy is very positive on NRZ
ReplyDeletehttp://reminiscencesofastockblogger.com/2015/11/10/week-227-no-pain-no-gain/
I've read through this a couple of times and still don't really understand how these mortgage servicers work, but that's OK. No need to figure everyone out.
Funny I was looking at this stock recently.
DeleteMy initial take was the market would probably look negatively at them because they have exposure to interest rate risks on their debt which I think was pretty big...like $3 Billion.
DeleteEven if rates rise really slowly, I want absolutely no exposure to anything negatively impacted. I think after the first rate hike the very next conversation will be when is the next one. I think the market will take directional bets and push those bets to extremes, at which point playing the opposite side might work. But I don't think we're there yet.
So a bank like BAC...I don't think that has even come close to pricing in this directional bet. I think we could see a few surges over the next year or so in that stock. The first surge will most likely end right around the December Fed meeting. My bet is if people get irrational we could see it spike to $20. At that point I would probably take some off. But this is all assuming the market takes this in stride.
DeleteUltimately, I think BAC should be trading at around book which is about 40% higher.
These are the types of trades I like right now. I don't like the autos or home builders due to interest rate risk...again, the impact is probably minimal but I'm thinking traders will push those trades to extremes like they always do.
Yeah, that's one the thoughts I had too - seems like a lot of leverage which could go against them. He says it is a spread business, so may be OK, but not clear to me.
DeleteI still think autos and housing are OK as we've had a long period of underselling in autos and underbuilding in houses, so I think the catchup has a long way to go. Plus, if interest rates do start to rise, this has often pushed home buyers off the sidelines in the past as they want to get in ahead of more rate rises. But I can see why you'd want to stay away.
I would strongly avoid utilities, telcos and high yielders. I think they are in for a tough few years as so many people have bought these for yield and don't think about how rising rates will affect their profits and also push their prices down as bond yields become more competitive. I'm sure there's a lot of traditional GIC buyers in these now who would love to just lock in a 5 year GIC at 4% or so.
Most global indexes have been treading water in November, not surprising given the strong advances in October. Brazil's iBovespa builds on yesterday's reversal with a solid +1.86% advance today.
ReplyDeleteI'm going to spend a moment discussing FCX (Freeport McMoran), currently off -22% @ 9.32 since my entry last week (@ 11.88). 'Single stock risk' (especially with a high beta stock) can be extreme. The success of a buy-and-hold approach is highly dependent on proper sizing. I'm fairly confident (as are company insiders who began accumulating heavily in the low twenties) that the stock will recover. However, the key to riding a bronco is emotional control. It will be hard to 'hold' when prices plunge, and even harder to continue holding when prices begin soaring. Have a target in mind.
The market is currently enduring 3 separate potential scam / scandals. VRX, MNK, EROS are all plunging lower. I think this kind of stuff weighs on the psyche of the individual investor, no doubt about it. The best thing for the market is for it to just trade sideways as it digests these debacles.
Deletehttp://www.marketwatch.com/story/silicon-valley-shack-in-palo-alto-lists-for-nearly-2-million-2015-11-11
ReplyDeleteYou don't get much for $2 million these days.
$2M is about the going price for any shack in Silicon Valley. How about East Palo Alto?
DeleteEROS - Nearly another 50%, thanks to no earnings report. Tomorrow, the rest of the story.
ReplyDeleteInvestors are 'really pessimistic': Schwab
ReplyDeletehttp://finance.yahoo.com/news/investors-really-pessimistic-schwab-121716447.html
Maybe investors doubt a 2-car garage will sell for $2M?
DeleteENR - Reports manyana.
ReplyDeleteBXMT - Should follow rates upward.
ReplyDeleteYELP - Owned this briefly @ $69.27
ReplyDeleteMore young adults live at home now, than 5 years ago. I guess this means they defer marriage.
ReplyDeleteZINC - What a rough month. Demand must be off the hook?
ReplyDeleteI chose to build a 15% position today in YINN just thinking that china big caps are due for a rally since small caps left me behind. Ashr reflects small cap spec stuff like the Shanghai
ReplyDeleteSold at 21.8 pre market. I can almost guarantee they sell this off
DeleteCP- I took a large LT position in WY the other day at 29.00 based on the merger with PCL.
ReplyDeleteYep, I missed ur post. I like the idea, but missed the drop that day I guess. Anyway, lumber is a commodity and I've got too much of commodities already. Eventually commodities will bottom, hopefully.
DeleteMBUU - What's the thought?
ReplyDeleteI don't anticipate any responses.
DeleteHaven't had time to look at much. Why them over BC?
DeleteTook at 1/4 position in SPY for year end. So getting a little longer here and have quite a few positions now. Based on size...
ReplyDeleteQQQ
WY
SPY
SEDG
ENPH
GPRO
BXE
ARR
Nice, good luck! I regret not doing the same at the Oct lows...I had actually planned on just going all in on SPY but opted to pick stocks. I had a variety of positions which actually ended up going down due to the 30% hit I took on EROS.
DeleteEROS was a well orchestrated trap, still wondering where that was being advertised.
DeleteI still think the play with miners is to wait for divergences between that and gold. I think Gold makes a big whoosh down fairly soon, especially if the market goes to new all time highs in the face of an interest rate hike. That would be a one-two knockout punch for gold I think. Miners are really washed out so will need to start thinking about a few longer term positions here.
ReplyDeleteI added to BAC here today.
ReplyDeleteAINV/OZM - Perhaps these are too risky? Already beat down, not sure why exactly but not being called scams.
ReplyDeleteIRBT - Just a note, their carpet sweepers work well on pontoon boats. Place this thing up on the bow and it sweeps the sand away from the carpet and doesn't fall off into the water b/c it senses the edge of the bow and follows it around the front..
ReplyDeleteKO - Wonder if Ackman is short this one?
ReplyDeleteSGG - Well that was a nice move off the bottom, might depend on which way $US goes from here but Euro still needs to remain weak for the benefit of an EU that drastically needs to be reorganized (IMO).