(a) David failed to get up early. I had a premonition when WTI and BCEI both gapped up +6%. If I'd had his number I would have at least texted. (b) Bears had their best shot in weeks, and failed to follow through. (c) I agree completely with Brent's comment re an Opposite Year. We've seen it year-to-date, and there's little doubt 'sell in May' will punish shorts/sidelined investors with the worst summer of their investing lives. (d) I don't know how he did it, but if Mark was able to resurrect both his portfolio and himself with today's tepid performance in SEDG-> kudos.
By the way, there is little doubt in my mind that WTI and BCEI (and any other energy company that has avoided bankruptcy) will easily be 2-3 baggers by year end. (No skin in that game other than incidental exposure via emerging markets or total market ETFs.)
Hope you're partially right as I am still holding some pbr and bought nm and sblk and mtch today. I'll root for rallies in those with a further drop in xbi
If only we'd all piled into PBR @ 3. There was never any doubt that both Brazil and PBR would rebound strongly. It just required too much patience, the kind only possessed by investors with long-term horizons.
David - I'm thinking so as well. I've been waiting for the aversion move in this classical sentiment chart: http://c3352932.r32.cf0.rackcdn.com/content/pic0a06f4d93b2cd096612df57a92a605b2.PNG
Compare that to the IYT chart: http://stockcharts.com/h-sc/ui?s=IYT&p=D&yr=2&mn=0&dy=0&id=p59104518683
Having said that, sentiment (in traders minds) is so negative and skeptical that I doubt any down turn will be significant.
We are now hitting the upper band of the trading range we've been in the last couple years, so we are having trouble breaking through as it is now resistance and people are selling in anticipation of a turn back dow, but I think we break through to the upside this time for the next leg of the bull.
Here's the thing. Traders all look at the same charts and will collectively come up with a conclusion. The conclusion that is reached is the one you want to fade. So the more we hear about pullbacks, corrections and downtrends, the more likely markets will continue to rally.
Pullbacks in these sectors are most likely for buying. The market in general has a valuation problem. In particular utilities, tech, blue chips, and biotechs
Also, WTI is right back just above the previous low, after making a new high recently. I think this pattern of higher lows and higher highs will continue. So I just sold at $13.45 the EROS shares I purchased on a pullback to $11 a few weeks ago, and moved that money into WTI at $2.27.
Folks, UNG is now touching the rising line connecting the lows since mid-March. Supposedly, from the trading point of view, this is the best time to enter...
DGLD is very tempting now. Since I don't have anymore cash left, I just sold the rest of my EROS at $13.35, closing that "erotic" chapter in my account with a nice gain. Moved that money into DGLD at $48.57. Placed a sell stop at $47.60.
I'll credit my sixth sense for being half right. All indexes (including VT [total world] +0.7%) closed near the highs, but only after dipping into negative territory near the open. Which is the only 'half' that matters.
I had a bid in on UNG at 6.71 and was filled yesterday, I think we are near a low.
TLT looks interesting is kinda of moving around 1% per day at times very up and down. I know its too slow for you. But I have a hard time seeing rates going up.
XBI is setting up for another rollover if it continues to track the Nasdaq from 2000-2001. Its now on the right side of the mountain and I'm trying to determine if its in the beginning of the next down move or if there is another small pop coming.
So that's why, I suppose, instead of buying stocks on the way down, it is good to wait until a significant rally takes place and people start talking about the start of a new bull market, and then wait for an inevitable large pullback before buying. I wonder if we'll see the same large pullback in PM stocks...
My trading seems to be going opposite the market the past week. Up days are bad for me and down days are good. I'm positioned for a pop tomorrow because I think today's action and yesterday's action sucked in a lot of shorts.
Ended up buying some amzn. Reason being is they are stealing significant search revenues from Google. I have been building up an Amazon business and see the amount of spending going into search ads for products and I think Amazon is just scratching the surface of this potential.
I get the arguments about pricing etc but I think looking at Amazon as a retailer of goods is the wrong way of looking at them. Instead, they're a middle man that takes a cut of every transaction and holds little inventory risk relative to total sales when compared with other retailers. They have one of the world's largest logistics businesses, they will have the largest trucking business in the world, they have a huge search business, they have a sizable video streaming business, and they have the worlds largest cloud / hosting business.
But I'm a trader and will probably not be able to stay in it for long especially with a big gap up from earnings to deal with. Just worth noting that it's not really a retailer like a walmart.
Another thing about AMZN - look at their trend in gross margins. They have grown from 22% a few years ago to 35% last quarter. There is massive scale in that business. I think they could eventually become the largest company in the market.
I could see AMZN trading well. People like growth and they have growth. I do question how much of the growth is them just buying business, but that is irrelevant in the shorter term.
I really don't like buying these mega-cap companies though. Same as AAPL, when you have a huge market cap like AMZN's $300+ billion, it is awfully hard to move the needle and getting a double is almost impossible. Plus no dividend support for AMZN if they do get into another big cap-ex cycle like some are talking.
Same as a lawyer buddy of mine. He has a good car crash business with lots of referrals, but one of the big reasons people like him because he keeps his costs low and undercuts the big legal firms by half or more. He is trying to sell his business, and he is getting offers as he has a good block of business and gets a lot of calls which they could convert a portion of to new clients, but no-one is willing to do his low-cost model, so the value he can sell the business for is much less than he thought.
Looks like Trump got the Republican nomination - Canadians and most countries outside the US have a tough time seeing how a guy like that gets through, but it will make for an interesting election at least.
Simple, people are FED up with the status quo and want change, just not sure anyone including Trump can do it but I think people think its their best shot.
When you see reports showing labor's share of GDP at long term low's, you can sure understand why.
We have less of it in Canada because we are more socialist with higher minimum wages, higher taxes, more services like good public education and healthcare and less income disparity. I think the US moves this way over the next decade or maybe 2. Labor needs a bigger piece of the pie and all 3 of Trump, Clinton and especially Sanders are pushing for a more socialist government and the population appears to also be wanting this.
My DGLD position is hedging the decline in the oil stocks. Moved up the stop on my position to my entry at $48.50 so as not to let a "profit turn into a loss."
UGAZ is very close now to the line connecting the tops of previous peaks starting mid-March, if we exclude the latest "protrusion." So I decided to sell just now at $25.63 the shares I purchased at $23.20 a couple of days ago. This will give me some cash to buy back into UGAZ if it drops. On the other hand, if it jumps again tomorrow, then it will again rise above that magic line connecting tops, which will yield more credibility to the claim that NG is in a bull market, which means that I will be OK with buying it back on a subsequent drop even if that drop happens to be back to $26 level...
David - You've been doing a great job this year. Really enjoying watching you take a new approach to the market and not being stuck on singular themes. Get rid of options trading and I think you'll be really killing it. It's horrible to go through losing tons of money but its the only way you can truly find a method that works for yourself. When you start stacking up a bunch of small wins it all can really snowball into a big win.
Thanks for pointing the UGAZ trade to me! I did get into it a bit too early, but then through trading all of its ups and downs I have probably reduced the cost basis of my initial purchase to something way below the present levels. :)
I ended up getting lucky on my entry point today on TNA at $57.26. Not sure if I will hold into tomorrow but I'm leaning toward it because I'm seeing lots of negativity / fear creep back into the market.
I'm tempted to buy back into FCX here as I think oil has bottomed and is in a new bull market. But I might be better served buying dips back to 30 RSIs on these things. It might be at higher levels but it tends to reduce the risk which is the most important thing when we're trading. Good example was UGAZ. I could have bought and held my original position at $20 (and probably made more money) but instead I have focused on only entering on oversold readings where support is very close to make it a lower risk trade. With the market overall being very expensive I think this is the best approach to take on everything for the near term.
TNA has been an awesome trading ETF for the past few months. It would have been probably more profitable to buy and hold but I've traded this thing numerous times over the past few months and have made money about 90% of the time by just buying on deeply oversold hourly / 4 hour charts where support is nearby. Today it basically filled the gap up from $57.10 a few weeks ago, which is where I was targeting an entry point. It also happened to have a RSI of 30 on the hourly chart, the 4hour chart, and the minute chart.
The market has obviously changed for the past year and become much more difficult to invest in. I've just been focusing on things that have been working recently and picking up stuff that gets really oversold on hourly charts. It's been a challenge to keep my emotions at bay but it has been a great learning experience and I'm finally having some success this year after a rough 2nd half of last year.
Global markets sold off hard once more in the early going, but there are signs the selling pressure has abated:
(a) The S&P500 is currently off -0.47% @ 2054 after dipping to 2045 earlier. The DJIA is off -78 points and about 60 points off its intraday low. (b) EEM (emerging markets) giving up another -1.5%. However, ASHR (China 'A' shares) off just -0.21% and EWZ (Brazil) is actually up +1.42%. (c) Oil prices now +0.46%.
Friday's 'jobs report' may tell us more about short-term direction.
Picked up a little TASR ahead of earnings at $17.66. I honestly have no edge on it but only have about 4% in it. I've watched their margins and cash flow improve significantly over the years and bears are all over it. Trades at about 20x FCF which is growing about 20% per year. Cash is now more than 10% of total market cap. I have some cash set aside to double up if it drops.
There are always good reasons for a stock to significantly the sector. I read the following in the WTI earnings release today:
"Liquidity: At March 31, 2016, we had a cash balance of $370.6 million and no amount of undrawn capacity available under our revolving bank credit facility.
During February of 2016, we borrowed $340 million under our Credit Agreement. On March 23, 2016, the borrowing base under our Credit Agreement was reduced as part of the spring redetermination from $350 million to $150 million. We are required to repay the amount of borrowings and letters of credit in excess of the redetermined borrowing base in three installments over 90 days. We repaid $52 million on March 31, 2016 and $12 million on May 2, 2016. We are required to repay $64 million on May 31, 2016 and $64 million on June 30, 2016, in addition to interest payments on our long-term debt.
In February and March, 2016, the Company received several orders from the BOEM demanding that the Company provide additional supplemental bonding on certain Federal offshore oil and gas leases, rights of way and rights of use and easement owned and/or operated by the Company. One order was rescinded and re-issued and another one was rescinded. The outstanding orders total $260.8 million. We have filed appeals with the Interior Board of Land Appeals regarding three of the BOEM orders - specifically the February order that required W&T to post a total of $159.8 million in supplemental bonding and two March orders requiring $68 million in supplemental bonding. We have had numerous discussions with the BOEM and its sister agency, the BSEE, since receiving the orders. The objective of the Company remains to reach a mutual agreement on the financial assurance requirements.
The issuance of any additional surety bonds to satisfy the BOEM orders or any future BOEM orders may require the posting of cash collateral, which may be significant, and the creation of escrow accounts. We continue to have discussions with BOEM regarding these matters."
What do you make of this, guys? Is it really bad? Was this known before the earnings release today to those who monitor BOEM activity or is this news for investors?
I would rather see a company running out of cash gradually, over many quarters, waiting for the oil price to rebound than to see it give up all of its cash as a collateral in response to BOEM orders... I guess they can just stop operating, temporarily, on those Federal offshore oil and gas leases, right?
David, You might want to listen to the concall tomorrow morning at 9:30 EST. This made be made more clear there. You can wait for the seeking alpha transcript, but it may be more timely to listen.
Shareholder equity went from negative $526 million to negative $715 million. I can see why the financiers would be nervous.
Ended up taking off all of my positions except some TASR after hours. I have had a pretty solid week and taking a night off. Futures should be an explosive move either way tomorrow and I'd rather sleep in peace.
been a flat/channel market for almost a couple years now. Good to play the oversold/overbought game in this type of a market. Good you are doing well with it and wish I had been doing it in hindsight.
Have to believe we are near the end of this now as flat markets just don't seem to stay that way for much longer. We should move into an uptrend or downtrend of some sort soon. I'm still thinking up, but will watch and see.
I agree and agree we will go up. I think I made a mistake taking chips off today. Fcx and PBR are great plays going forward IMO as they are in new bull markets after huge downturns and sentiment is still skeptical / negative toward them
I heard that a good trader is the one who can take a loss on a position that stopped looking attractive (either because the chart stopped looking bullish or the fundamentals have turned for worse) and move on to better pastures. Since the bulk of my WTI purchased were in the $2.18-$2.26 range, I think I should try to get out of it with a small loss, while I can. So I just placed a sell stop limit at $2.20/$2.10 under my whole position. If executed, I'll move the money into a safer investment, say XOP. It already had a decent pullback, and if oil is set to go back up, I can make back on XOP what I would lose on WTI. IF I get lucky and will be able to exit it at just a small loss...
Oil futures are up nicely now, so maybe the traders will not sell WTI at the open but will wait a little to see how it responds to a jump in oil, allowing it to open within my sell stop range or, God willing, ABOVE that range! There is even a tiny chance that all of these WTI troubles were already known to informed traders, and so WTI will simply gap up tomorrow and will not look back.
Let price and volume be your guide....you've been doing a good job of identifying entry points...exit points are no different. Just sell and move on to the next. We will never be able to make money on all trades.
Bid/Ask pre-market at 9:18 is $2.22. to $2.35, so good chance it opens higher this morning.
I've had it happen a number of times when I thought "oh crap, that is bad news for my stock, I better sell" and then the market opens up because worse news is priced in. Hopefully that is the case for you today.
We'll know more by end of day, but for now it appears the market has sprung a bear trap. Most assets have gapped up above Wednesday's highs, trapping bears who shorted into yesterday's decline. USO (oil) +3.8%, RSX (Russia) +2.37%. Less aggressive opening gaps in EEM (emerging markets), FXI (China 'H' Shares), ASHR (China 'A' Shares), and EWZ (Brazil)- all up around +1%.
I had a busy morning and did not have the time to describe how my WTI story has ended. First of all, it kinda sucks that after the gap up in WTI, the market makers saw my sell stop order come in and they promptly pushed WTI down to just hit it and then ramped it back up. But in the grand scheme of things, I would rather be left behind a soaring stock than seeing it open 30% down and then sliding toward as the company runs of out its cash and declares bankruptcy. So I'll try to do what I should have done with AUMN -- taken a hit early and move on.
I rotated about 2/3 of the money from selling WTI into NDP, which still pays about a 14% annual dividend at its current price, and so even if oil stays flat, this is a good place to park cash. Put the remaining 1/3 into NM, as it is close to its previous bottom and the chart seems to be leveling out.
Mike, what can you say about NM? Why do you think it is back to its Feb bottom while BDI has rallied significantly since Feb?
I have also had bad luck entering orders the night before and never do it anymore. It's easy for me being Eastern Time Zone and pretty much always around for the market open, but I feel the same as you, taken advantage of in these situations.
There is a lot of good info on Seeking Alpha on NM and the dry bulk sector - seems to attract far more interest than the market cap of companies would indicate. James Catlin has good articles on the industry as well.
Re NM, I'm not sure about the short term trade. The stock has little equity and a lot of debt, so you've got a lot of leverage in the stock price (both ways). The success of these stocks is very dependent on shipping rates and the ability of their customers to pay. It is a complex market, because you have to balance the supply, which is affected by new deliveries, old ship scrappage and the price of oil (which drives ship speed and how many loads/per year) and the demand, which is mainly steel and steel inputs to China and Coal for electricity generation. I think both of these demand factors are in decline, so that makes it hard to turn around. People have better things to say about the energy shippers and container shipping is in the middle. NM has exposure to all 3 kinds of shipping, as well as the South America barge subsidiary, but most exposure to Dry BUlk.
David - A long on NM is completely dependent on them being able to sell ships at or near book value. I would look closely at their debt maturity dates. If they can't pay them off they're toast.
The reaction of investors to the monthly employment report is always fun to watch. The key is to simply watch, and to refrain from trading. It's impossible to predict price movements, and the only that matters is the close. DJIA futures tumbled as much as -100 points following a 'weak' April number (160,000 jobs added, fewer than the consensus 'forecast'), but the index is now +7. EEM (emerging markets) has reversed from a -0.6% opening decline to a +0.52% gain. EWZ (Brazil) -1% to +1.27%. FXI (China 'H' Shares) -1.3% to -0.2%. I'm pleased to see buying interest at the lows, but the above action tells me nothing about today's close.
Still have on my watch list. We may get an even bigger pullback before this deal is done, and I think will bounce afterwards. 8 fwd p/e, but not sure how the buyout plays into this.
Note the savvy moves in the chart above. An opening drop of -60 points in the DJIA->sharp reversal to +7 points->a second drop of -80 points an hour later, effectively:
(a) Dumping Nellies at the open. (b) Rewarding intrepid buyers with an immediate gain (while simultaneously eliciting seller's regret in group [a]). (c) Further shaking down group [b] (+ anyone in group [a] unable to resist buying back in) with the second drop. (d) Discouraging buyers via an extended chop below the flat line.
It's only late in the session when the (hopefully) smart money begins to make its move. Heading into the close, the DJIA is +60 points @ 17720, which may seem a modest victory for bulls, but hey that's 700 points above the 17k threshold that was breached just a short while ago.
Here's what happened (and didn't happen) today.
ReplyDelete(a) David failed to get up early. I had a premonition when WTI and BCEI both gapped up +6%. If I'd had his number I would have at least texted.
(b) Bears had their best shot in weeks, and failed to follow through.
(c) I agree completely with Brent's comment re an Opposite Year. We've seen it year-to-date, and there's little doubt 'sell in May' will punish shorts/sidelined investors with the worst summer of their investing lives.
(d) I don't know how he did it, but if Mark was able to resurrect both his portfolio and himself with today's tepid performance in SEDG-> kudos.
By the way, there is little doubt in my mind that WTI and BCEI (and any other energy company that has avoided bankruptcy) will easily be 2-3 baggers by year end. (No skin in that game other than incidental exposure via emerging markets or total market ETFs.)
DeleteHope you're partially right as I am still holding some pbr and bought nm and sblk and mtch today. I'll root for rallies in those with a further drop in xbi
ReplyDeleteIf only we'd all piled into PBR @ 3. There was never any doubt that both Brazil and PBR would rebound strongly. It just required too much patience, the kind only possessed by investors with long-term horizons.
ReplyDeleteCheck out the after hours plunge and recovery in PBR. Off -10% then +10%. That's the kind of action that makes trading a young man's game!
DeleteI wouldn't be surprised if SPY drops below 200 before staging the next leg up...
ReplyDeleteDavid - I'm thinking so as well. I've been waiting for the aversion move in this classical sentiment chart:
Deletehttp://c3352932.r32.cf0.rackcdn.com/content/pic0a06f4d93b2cd096612df57a92a605b2.PNG
Compare that to the IYT chart:
http://stockcharts.com/h-sc/ui?s=IYT&p=D&yr=2&mn=0&dy=0&id=p59104518683
Having said that, sentiment (in traders minds) is so negative and skeptical that I doubt any down turn will be significant.
On the other hand, look at charts like $COMP, SOX, BAC, $SPX and several others and there's a clear downtrend going on over the past year.
DeleteHere's how I see the broad market:
ReplyDeletehttp://imgur.com/wJSEKKs
We are now hitting the upper band of the trading range we've been in the last couple years, so we are having trouble breaking through as it is now resistance and people are selling in anticipation of a turn back dow, but I think we break through to the upside this time for the next leg of the bull.
Use CTRL+ to zoom in.
DeleteHere's the thing. Traders all look at the same charts and will collectively come up with a conclusion. The conclusion that is reached is the one you want to fade. So the more we hear about pullbacks, corrections and downtrends, the more likely markets will continue to rally.
ReplyDeleteUp trends tend to last longer than people think. The one in oil and miners may be in inning 2
DeleteWell really miners and emerging markets.
DeletePullbacks in these sectors are most likely for buying. The market in general has a valuation problem. In particular utilities, tech, blue chips, and biotechs
DeleteSold labd at 44.2 and added to pbr at 7.4 and 7.57
ReplyDeleteReloaded at $23.20 the UGAZ shares I sold on Friday at $27. Also, purchased more NM at $1.00.
ReplyDeletePlaced a sell limit at $27 for UGAZ shares purchased today.
DeleteAlso, WTI is right back just above the previous low, after making a new high recently. I think this pattern of higher lows and higher highs will continue. So I just sold at $13.45 the EROS shares I purchased on a pullback to $11 a few weeks ago, and moved that money into WTI at $2.27.
ReplyDeleteFolks, UNG is now touching the rising line connecting the lows since mid-March. Supposedly, from the trading point of view, this is the best time to enter...
ReplyDeleteDGLD is very tempting now. Since I don't have anymore cash left, I just sold the rest of my EROS at $13.35, closing that "erotic" chapter in my account with a nice gain. Moved that money into DGLD at $48.57. Placed a sell stop at $47.60.
ReplyDeleteI'll credit my sixth sense for being half right. All indexes (including VT [total world] +0.7%) closed near the highs, but only after dipping into negative territory near the open. Which is the only 'half' that matters.
ReplyDeleteI grabbed UGAZ today at $22.77 and also picked up a little VRX at $32.5.
ReplyDeleteI believe you could see UGAZ up 50 to 70% in the next week or two.
DeleteI had a bid in on UNG at 6.71 and was filled yesterday, I think we are near a low.
DeleteTLT looks interesting is kinda of moving around 1% per day at times very up and down. I know its too slow for you. But I have a hard time seeing rates going up.
SP futs off -14 at the moment.
Long both
DeleteIF the uptrend continues, then sure :)
ReplyDeleteTSX smallcaps a good place to be this year - up 20% YTD. Would be up 32% for you US$ traders.
ReplyDeleteLots of smallcap miners and energy companies in here.
TLT hit my bid at 129.72 while sleeping, out.
ReplyDeleteTook the 5-6% gains in ugaz and vrx
ReplyDeleteGrabbed some UAL today at 46.7-46.8 avg. thinking it could go to $50 if oil stay down another day
ReplyDeleteSold UAL at $47.35
DeleteBought some FCX at $12.10 and PBR at $7.22 for a quick flip
ReplyDeleteXBI is setting up for another rollover if it continues to track the Nasdaq from 2000-2001. Its now on the right side of the mountain and I'm trying to determine if its in the beginning of the next down move or if there is another small pop coming.
ReplyDeleteLABD looks really good (inverse of XBI) but timing is crucial with those things
DeleteLooking at the 3-month chart of oil, its current pullback is insignificant, but the crappy oil stocks are really getting sold...
ReplyDeleteStandard action IMO. We're not quite at the stage where oil is high enough to convince people it's a new bull
DeleteSo that's why, I suppose, instead of buying stocks on the way down, it is good to wait until a significant rally takes place and people start talking about the start of a new bull market, and then wait for an inevitable large pullback before buying. I wonder if we'll see the same large pullback in PM stocks...
DeleteSold PBR at $7.2 and half of FCX at $12.06. Oh well.
ReplyDeleteLong TNA after hours at $58.93
ReplyDeleteWe finally see a bad day all 'round. DJIA -140 points, SPX -0.94%, EEM (emerging markets) -2.76%, VT (world stocks) -1.46%.
ReplyDeleteMy trading seems to be going opposite the market the past week. Up days are bad for me and down days are good. I'm positioned for a pop tomorrow because I think today's action and yesterday's action sucked in a lot of shorts.
DeleteSold fcx at 12.25 and tna at 58.4
ReplyDeleteEnded up buying some amzn. Reason being is they are stealing significant search revenues from Google. I have been building up an Amazon business and see the amount of spending going into search ads for products and I think Amazon is just scratching the surface of this potential.
ReplyDeleteI get the arguments about pricing etc but I think looking at Amazon as a retailer of goods is the wrong way of looking at them. Instead, they're a middle man that takes a cut of every transaction and holds little inventory risk relative to total sales when compared with other retailers. They have one of the world's largest logistics businesses, they will have the largest trucking business in the world, they have a huge search business, they have a sizable video streaming business, and they have the worlds largest cloud / hosting business.
DeleteBut I'm a trader and will probably not be able to stay in it for long especially with a big gap up from earnings to deal with. Just worth noting that it's not really a retailer like a walmart.
DeleteAnother thing about AMZN - look at their trend in gross margins. They have grown from 22% a few years ago to 35% last quarter. There is massive scale in that business. I think they could eventually become the largest company in the market.
DeleteI could see AMZN trading well. People like growth and they have growth. I do question how much of the growth is them just buying business, but that is irrelevant in the shorter term.
DeleteI really don't like buying these mega-cap companies though. Same as AAPL, when you have a huge market cap like AMZN's $300+ billion, it is awfully hard to move the needle and getting a double is almost impossible. Plus no dividend support for AMZN if they do get into another big cap-ex cycle like some are talking.
Same as a lawyer buddy of mine. He has a good car crash business with lots of referrals, but one of the big reasons people like him because he keeps his costs low and undercuts the big legal firms by half or more. He is trying to sell his business, and he is getting offers as he has a good block of business and gets a lot of calls which they could convert a portion of to new clients, but no-one is willing to do his low-cost model, so the value he can sell the business for is much less than he thought.
Deletesold UNG, looking at banks/financials to bounce off the 50 dma for opportunity.
ReplyDeleteLooks like Trump got the Republican nomination - Canadians and most countries outside the US have a tough time seeing how a guy like that gets through, but it will make for an interesting election at least.
ReplyDeleteSimple, people are FED up with the status quo and want change, just not sure anyone including Trump can do it but I think people think its their best shot.
DeleteThat's my take FWIW.
When you see reports showing labor's share of GDP at long term low's, you can sure understand why.
DeleteWe have less of it in Canada because we are more socialist with higher minimum wages, higher taxes, more services like good public education and healthcare and less income disparity. I think the US moves this way over the next decade or maybe 2. Labor needs a bigger piece of the pie and all 3 of Trump, Clinton and especially Sanders are pushing for a more socialist government and the population appears to also be wanting this.
Damn...missed the run in LABD. That's always how it happens. No good entry
ReplyDeletebidding 58.90ish on STT GTC
ReplyDeleteTEVA has gotten cheaper since you guys were last talking about it, seems to be at an interesting level here.
ReplyDeleteBB - Yeah my near term conviction on AMZN isn't that high given the run it has had and the gap up. Longer term is different.
ReplyDeleteMy DGLD position is hedging the decline in the oil stocks. Moved up the stop on my position to my entry at $48.50 so as not to let a "profit turn into a loss."
ReplyDeleteUGAZ is very close now to the line connecting the tops of previous peaks starting mid-March, if we exclude the latest "protrusion." So I decided to sell just now at $25.63 the shares I purchased at $23.20 a couple of days ago. This will give me some cash to buy back into UGAZ if it drops. On the other hand, if it jumps again tomorrow, then it will again rise above that magic line connecting tops, which will yield more credibility to the claim that NG is in a bull market, which means that I will be OK with buying it back on a subsequent drop even if that drop happens to be back to $26 level...
ReplyDeleteDavid - You've been doing a great job this year. Really enjoying watching you take a new approach to the market and not being stuck on singular themes. Get rid of options trading and I think you'll be really killing it. It's horrible to go through losing tons of money but its the only way you can truly find a method that works for yourself. When you start stacking up a bunch of small wins it all can really snowball into a big win.
DeleteCongrats man!
Thanks for pointing the UGAZ trade to me! I did get into it a bit too early, but then through trading all of its ups and downs I have probably reduced the cost basis of my initial purchase to something way below the present levels. :)
DeleteThe expectation for WTI going into earnings after market today seem to be pretty low -- oil is back into the green, but WTI is still red...
ReplyDeleteI ended up getting lucky on my entry point today on TNA at $57.26. Not sure if I will hold into tomorrow but I'm leaning toward it because I'm seeing lots of negativity / fear creep back into the market.
ReplyDeleteI'm tempted to buy back into FCX here as I think oil has bottomed and is in a new bull market. But I might be better served buying dips back to 30 RSIs on these things. It might be at higher levels but it tends to reduce the risk which is the most important thing when we're trading. Good example was UGAZ. I could have bought and held my original position at $20 (and probably made more money) but instead I have focused on only entering on oversold readings where support is very close to make it a lower risk trade. With the market overall being very expensive I think this is the best approach to take on everything for the near term.
ReplyDeleteTNA has been an awesome trading ETF for the past few months. It would have been probably more profitable to buy and hold but I've traded this thing numerous times over the past few months and have made money about 90% of the time by just buying on deeply oversold hourly / 4 hour charts where support is nearby. Today it basically filled the gap up from $57.10 a few weeks ago, which is where I was targeting an entry point. It also happened to have a RSI of 30 on the hourly chart, the 4hour chart, and the minute chart.
DeleteThe market has obviously changed for the past year and become much more difficult to invest in. I've just been focusing on things that have been working recently and picking up stuff that gets really oversold on hourly charts. It's been a challenge to keep my emotions at bay but it has been a great learning experience and I'm finally having some success this year after a rough 2nd half of last year.
NOW the shorts are covering WTI ahead of earnings :) Or maybe they are just trading WTI off the oil price moves...
ReplyDeleteGlobal markets sold off hard once more in the early going, but there are signs the selling pressure has abated:
ReplyDelete(a) The S&P500 is currently off -0.47% @ 2054 after dipping to 2045 earlier. The DJIA is off -78 points and about 60 points off its intraday low.
(b) EEM (emerging markets) giving up another -1.5%. However, ASHR (China 'A' shares) off just -0.21% and EWZ (Brazil) is actually up +1.42%.
(c) Oil prices now +0.46%.
Friday's 'jobs report' may tell us more about short-term direction.
Picked up a little TASR ahead of earnings at $17.66. I honestly have no edge on it but only have about 4% in it. I've watched their margins and cash flow improve significantly over the years and bears are all over it. Trades at about 20x FCF which is growing about 20% per year. Cash is now more than 10% of total market cap. I have some cash set aside to double up if it drops.
ReplyDeleteThere are always good reasons for a stock to significantly the sector. I read the following in the WTI earnings release today:
ReplyDelete"Liquidity: At March 31, 2016, we had a cash balance of $370.6 million and no amount of undrawn capacity available under our revolving bank credit facility.
During February of 2016, we borrowed $340 million under our Credit Agreement. On March 23, 2016, the borrowing base under our Credit Agreement was reduced as part of the spring redetermination from $350 million to $150 million. We are required to repay the amount of borrowings and letters of credit in excess of the redetermined borrowing base in three installments over 90 days. We repaid $52 million on March 31, 2016 and $12 million on May 2, 2016. We are required to repay $64 million on May 31, 2016 and $64 million on June 30, 2016, in addition to interest payments on our long-term debt.
In February and March, 2016, the Company received several orders from the BOEM demanding that the Company provide additional supplemental bonding on certain Federal offshore oil and gas leases, rights of way and rights of use and easement owned and/or operated by the Company. One order was rescinded and re-issued and another one was rescinded. The outstanding orders total $260.8 million. We have filed appeals with the Interior Board of Land Appeals regarding three of the BOEM orders - specifically the February order that required W&T to post a total of $159.8 million in supplemental bonding and two March orders requiring $68 million in supplemental bonding. We have had numerous discussions with the BOEM and its sister agency, the BSEE, since receiving the orders. The objective of the Company remains to reach a mutual agreement on the financial assurance requirements.
The issuance of any additional surety bonds to satisfy the BOEM orders or any future BOEM orders may require the posting of cash collateral, which may be significant, and the creation of escrow accounts. We continue to have discussions with BOEM regarding these matters."
What do you make of this, guys? Is it really bad? Was this known before the earnings release today to those who monitor BOEM activity or is this news for investors?
When will I learn to avoid single-company risk???
DeleteI have no clue man. Who even knows what the market will do with this info either?
DeleteI would rather see a company running out of cash gradually, over many quarters, waiting for the oil price to rebound than to see it give up all of its cash as a collateral in response to BOEM orders... I guess they can just stop operating, temporarily, on those Federal offshore oil and gas leases, right?
DeleteThey intentionally make it almost impossible for anyone to really figure it out. They all do it.
DeleteThey reported at 5:00pm PST?
DeleteDavid,
DeleteYou might want to listen to the concall tomorrow morning at 9:30 EST. This made be made more clear there. You can wait for the seeking alpha transcript, but it may be more timely to listen.
Shareholder equity went from negative $526 million to negative $715 million. I can see why the financiers would be nervous.
Back in FCX after hours at $11.78
ReplyDeleteEnded up taking off all of my positions except some TASR after hours. I have had a pretty solid week and taking a night off. Futures should be an explosive move either way tomorrow and I'd rather sleep in peace.
ReplyDeleteMike,
ReplyDeletebeen a flat/channel market for almost a couple years now. Good to play the oversold/overbought game in this type of a market. Good you are doing well with it and wish I had been doing it in hindsight.
Have to believe we are near the end of this now as flat markets just don't seem to stay that way for much longer. We should move into an uptrend or downtrend of some sort soon. I'm still thinking up, but will watch and see.
I agree and agree we will go up. I think I made a mistake taking chips off today. Fcx and PBR are great plays going forward IMO as they are in new bull markets after huge downturns and sentiment is still skeptical / negative toward them
DeleteI heard that a good trader is the one who can take a loss on a position that stopped looking attractive (either because the chart stopped looking bullish or the fundamentals have turned for worse) and move on to better pastures. Since the bulk of my WTI purchased were in the $2.18-$2.26 range, I think I should try to get out of it with a small loss, while I can. So I just placed a sell stop limit at $2.20/$2.10 under my whole position. If executed, I'll move the money into a safer investment, say XOP. It already had a decent pullback, and if oil is set to go back up, I can make back on XOP what I would lose on WTI. IF I get lucky and will be able to exit it at just a small loss...
ReplyDeleteOil futures are up nicely now, so maybe the traders will not sell WTI at the open but will wait a little to see how it responds to a jump in oil, allowing it to open within my sell stop range or, God willing, ABOVE that range! There is even a tiny chance that all of these WTI troubles were already known to informed traders, and so WTI will simply gap up tomorrow and will not look back.
DeleteLet price and volume be your guide....you've been doing a good job of identifying entry points...exit points are no different. Just sell and move on to the next. We will never be able to make money on all trades.
DeleteBid/Ask pre-market at 9:18 is $2.22. to $2.35, so good chance it opens higher this morning.
DeleteI've had it happen a number of times when I thought "oh crap, that is bad news for my stock, I better sell" and then the market opens up because worse news is priced in. Hopefully that is the case for you today.
Bought back into ugaz ahead of the report at 24.7. Leaving space to add
ReplyDeleteAdded a little more at 23.8
DeleteSold at 23.8. Took a small hit
DeleteWe'll know more by end of day, but for now it appears the market has sprung a bear trap. Most assets have gapped up above Wednesday's highs, trapping bears who shorted into yesterday's decline. USO (oil) +3.8%, RSX (Russia) +2.37%. Less aggressive opening gaps in EEM (emerging markets), FXI (China 'H' Shares), ASHR (China 'A' Shares), and EWZ (Brazil)- all up around +1%.
ReplyDeleteBack in fcx. This is a wild stock
ReplyDeleteBack in UNG 6.73
ReplyDeleteBooked tasr prob should hold but impatient
ReplyDeleteBack into ugaz at 23.41
ReplyDeleteI ended up taking the hit on FCX and moving back to all cash. Looks like they want to sell everything a little more.
ReplyDeleteTrying TNA at $57.02.
ReplyDeleteI re-entered fcx a little bit ago 0.10 below where I sold. Hoping for a reversal
ReplyDeleteI had a busy morning and did not have the time to describe how my WTI story has ended. First of all, it kinda sucks that after the gap up in WTI, the market makers saw my sell stop order come in and they promptly pushed WTI down to just hit it and then ramped it back up. But in the grand scheme of things, I would rather be left behind a soaring stock than seeing it open 30% down and then sliding toward as the company runs of out its cash and declares bankruptcy. So I'll try to do what I should have done with AUMN -- taken a hit early and move on.
ReplyDeleteI rotated about 2/3 of the money from selling WTI into NDP, which still pays about a 14% annual dividend at its current price, and so even if oil stays flat, this is a good place to park cash. Put the remaining 1/3 into NM, as it is close to its previous bottom and the chart seems to be leveling out.
Mike, what can you say about NM? Why do you think it is back to its Feb bottom while BDI has rallied significantly since Feb?
Moody thinks that NM can run out of cash in 12 months:
Deletehttps://www.moodys.com/research/Moodys-downgrades-Navios-Holdings-ratings-to-Caa3-negative-outlook--PR_347693?WT.mc_id=AM~WWFob29fRmluYW5jZV9TQl9SYXRpbmcgTmV3c19BbGxfRW5n~20160426_PR_347693
What will NM do next? Will it declare bankruptcy or will it just sell one of its ships?
I have also had bad luck entering orders the night before and never do it anymore. It's easy for me being Eastern Time Zone and pretty much always around for the market open, but I feel the same as you, taken advantage of in these situations.
DeleteThere is a lot of good info on Seeking Alpha on NM and the dry bulk sector - seems to attract far more interest than the market cap of companies would indicate. James Catlin has good articles on the industry as well.
DeleteRe NM, I'm not sure about the short term trade. The stock has little equity and a lot of debt, so you've got a lot of leverage in the stock price (both ways). The success of these stocks is very dependent on shipping rates and the ability of their customers to pay. It is a complex market, because you have to balance the supply, which is affected by new deliveries, old ship scrappage and the price of oil (which drives ship speed and how many loads/per year) and the demand, which is mainly steel and steel inputs to China and Coal for electricity generation. I think both of these demand factors are in decline, so that makes it hard to turn around. People have better things to say about the energy shippers and container shipping is in the middle. NM has exposure to all 3 kinds of shipping, as well as the South America barge subsidiary, but most exposure to Dry BUlk.
David - A long on NM is completely dependent on them being able to sell ships at or near book value. I would look closely at their debt maturity dates. If they can't pay them off they're toast.
DeletePlaced a sell limit order at $26.50 for the UGAZ shares I purchased today at $23.41.
ReplyDeleteOverall shitty day for me. Ended up taking everything off again. Basically back to where I was in the beginning of the week.
ReplyDeleteI listened to an interview with Paul Ryan who said he won't endorse Trump. If they block his nomination then this market will drop 10% quickly.
Pretty much the same here but I can look forward to more losses tomorrow I'm sure.. :)
DeleteWhat do you think about oil man? I'm starting to see more and more blowups lately. WFT is the latest.
DeleteObviously we missed the easiest move. Not sure the risk is worth it here.
DeleteGrabbed a little DWTI at $98.3 after hours
ReplyDeleteThe reaction of investors to the monthly employment report is always fun to watch. The key is to simply watch, and to refrain from trading. It's impossible to predict price movements, and the only that matters is the close. DJIA futures tumbled as much as -100 points following a 'weak' April number (160,000 jobs added, fewer than the consensus 'forecast'), but the index is now +7. EEM (emerging markets) has reversed from a -0.6% opening decline to a +0.52% gain. EWZ (Brazil) -1% to +1.27%. FXI (China 'H' Shares) -1.3% to -0.2%. I'm pleased to see buying interest at the lows, but the above action tells me nothing about today's close.
ReplyDelete2nd said "It's impossible to predict price movements" So true.
ReplyDeleteThe trap door opened on TEVA.
Still have on my watch list. We may get an even bigger pullback before this deal is done, and I think will bounce afterwards. 8 fwd p/e, but not sure how the buyout plays into this.
DeleteGundlach thinking, 16 parts mostly fixed, if interested.
ReplyDeletehttp://marketrealist.com/2016/05/jeffrey-gundlach-discussed-donald-trump-negative-rates-stock-market-sohn-investment/
http://www.marketwatch.com/investing/index/djia
ReplyDeleteNote the savvy moves in the chart above. An opening drop of -60 points in the DJIA->sharp reversal to +7 points->a second drop of -80 points an hour later, effectively:
(a) Dumping Nellies at the open.
(b) Rewarding intrepid buyers with an immediate gain (while simultaneously eliciting seller's regret in group [a]).
(c) Further shaking down group [b] (+ anyone in group [a] unable to resist buying back in) with the second drop.
(d) Discouraging buyers via an extended chop below the flat line.
It's only late in the session when the (hopefully) smart money begins to make its move. Heading into the close, the DJIA is +60 points @ 17720, which may seem a modest victory for bulls, but hey that's 700 points above the 17k threshold that was breached just a short while ago.
Even the Hedge Funds bigwigs are negative - another good indicator of available firepower should the bull market start really moving:
ReplyDeletehttp://www.institutionalinvestorsalpha.com/Article/3551801/The-Morning-Brief-Sohn-Mixes-Gloom-Doom-and-a-3-Trillion-Amazon.html
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ReplyDelete