Friday, September 30, 2016
9/30/16 When Jupiter Aligns with Mars
What's lining up this morning?
(a) The ES (SPX futures) printed an overnight low of 2135 (now changing hands at 2143). Not quite 2124, but perhaps 'close enough.'
(b) An elevated put/call ratio.
(c) A -1600 tick was recorded on Thursday, 'the lowest since September 9 and equal to the one on May 18.'
(d) The Deutsche Bank crisis resembles (and may be remembered as) the Fall 2016 equivalent of the summer Brexit crisis.
I would say it all looks good, and expect the markets to rally over the next two weeks.
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Bought TEVA this morning at $45.99
ReplyDeleteI hate buying up but I'm taking the rebound in AMBA as a sign that GPRO has turned the corner. Long at $16.83
ReplyDeleteActually f it. I had second thoughts about it and I bailed. The best play on AMBA is AMBA.
DeleteOpening DB @ 13.07.
ReplyDeleteSold FCX at $11.02. Hoping for one more pullback to buy
ReplyDeleteMike, the copper price made it above $2.20 this morning, first time in a while. Oil is also rallying. FCX may not go back below $11...
ReplyDeleteJust trying to nibble back my YTD losses on FCX. Also sitting on nice gains for the year overall so looking to just do some small plays to add a little juice.
DeleteHLX hit my sell limit today at $8.08 for the shares I purchased at $7.08 a couple of weeks ago. Decided to rotate that money (and whatever I got from selling BTE yesterday at $4.50) into BTE at $4.34 just now. With oil price rallying, I expect BTE to be at $5 in no time. Just in case, though, placed a sell limit order at $4.84 for half of today's purchase...
ReplyDeleteFCX just can't keep it up above $11. WTF?
ReplyDeleteAlright I guess I decided to just get back in on FCX at $10.98. Let's commence the rally.
ReplyDeleteI really shouldn't be bothering with this stock, though. It's a total dog.
DeleteMTL was a dog for a few months while I was h holding it. But as soon as I sold it, it zoomed up vertically by almost 100℅, and it did it during the least expected time, when the whole sector was going down and there were no buyers...
DeleteSome of you guys were asking about trips. Well just got back from Grand Canyon, Oak Creek Canyon, and Sedona all great place's for hiking especially the last two. We had a really good time and enjoyed the vibe of peace versus the stuff going on in the world. The Grand Canyon is very international visitor wise on our first day heard at about seven different languages. The whole area is worth checking out.
ReplyDeleteHave not been doing much in the market, just three holdings, CEF, PCRX, and ETP. I cut PCRX holding in half and that portion took back all gains of the whole.
I seem to be in remission again, yeah, which is why we took the trip.
Here is my prescription for Cancer fighting.
a) least toxic drug you can find applicable to your cancer, in my case drug of choice is Rituxan very unlikely I would ever do old 70's chemo drugs again.
b) get a Biocharger at Biocharger.com and run it 3-5 times a day, you have to work up to it. As a pitch if try this and decide to keep it let'em know Joe C of AZ sent you as they provide favors for the referral. But seriously this device has merit.
c) take Rick Simpson Oil, aka Cannabis oil
d) DIET, change your diet, drink green tea or lemon water no soda period of any kind. Consider a Ketogenic way of eating plus alkalizing your system and stay away from sugar
e) exercise, find something you like to do that involves movement and do it four to five times a week.
Finally never give up.
Very good to hear. I've heard that doctors say absolutely no sugar.
DeleteI've been wanting to make a trip to the canyons. Went to Bryce Canyon 11 years ago. Awesome place. What time of year is best to bring the kids to the Grand Canyons?
Cool Mike, I think Bryce Canyon is next on our list, heard wonderful comments on it. I would think now, mid September to say mid October would be a great time. I would imagine summer is packed.
DeleteJunipine Resort is on 89A in Oak Creek Canyon just outside Sedona, nice rustic, woodsy area. Coming fron San Diego though may make you fairly North of it. I sure you and your family would have a great time.
Keep strong, T3d! Best wishes to you!
DeleteGood to hear about the cancer and that you are enjoying life! Hope it continues for a long time!
DeleteGrabbed some NBY at $4. Found out about them from the reminiscences guy.
ReplyDeleteBought more FCX at $11.10, on the false breakout, of course. Dog stock...
Well, FCX has an excuse today -- the copper is down. Still, its action sucks -- if EITHER copper or oil is down it is going down. But it will change at some point. Probably when Mike and I decide to sell out...
DeleteWhat aggravates me the most is seeing BHP run. I knew BHP is a great stock, but decided to load up on FCX instead of BHP during the recent pullback (when BHP dropped below $30). Should have grabbed a bit of both...
DeleteWhat's happening with GDX today???
ReplyDeleteI've been waiting to reload at $40 the GDXJ shares I sold at $45, and so I just placed a buy stop order at $40, in case a powerful reversal happens today while I am not looking...
DeleteGDXJ made a low at 39 today, then rallied to 39.45, and now is back down to 39.25. If it rises above 39.50 before dropping below 39, then it will be a higher low and a higher high. So I just moved down my buy stop order to 39.50.
DeleteThis order was just executed. I am OK with holding these shares for a long term -- it is a small position, just to have some gold-related stuff in my portfolio, when a new recession and negative interest rates seem likely in a couple of years.
Deleteyou crazy
DeleteOil is rallying for the 4th day in a row (or more), but oil stocks are not rallying anymore. This is usually a precursor to a drop. So I just sold some shares of HLX at $8.40, which I purchased at $7.60 during the recent pullback, while I still have a decent profit in that share lot...
ReplyDeleteWas busy running the kids around today but squeezed in a few trades. Took my lump on FCX and sold at 10.50 and bought EDZ at $22.20...just felt like a selloff day. I was very close to buying JDST yesterday at the close...man that would have been a score.
ReplyDeleteSold EDZ at $22.90 and bought CHK at $6.40...Still holding on to BITA, RDCM, NBY, YIN and cash.
I'm thinking people are just positioning for earnings season.
ReplyDeleteThe moves in yesterday's market have me more convinced that the move from a deflationary mindset to a more normal one is arriving. All of the things you'd expect to see are happening:
ReplyDeleteGold, Utilities (XLU), Bonds (TLT) all down big. XLU pretty much crashing.
Financials (XLF) up and small banks (KRE) up a lot. US$ up.
Plus you have the creation of a new S&P sector, real estate, maybe top-ticking the real estate market.
If we continue down this path, we should see higher rates, higher financials, lower gold, lower interest sensitive stocks, other commodities could go either way.
I think you're spot on. I am feeling a sense of urgency to get some exposure to financials. tough to get timing right ahead of the jobs report but I think its time to consider moving some money into them.
DeleteBought back into MMYT this morning at $22.5. Probably just going to hold this one for a while since the fundamentals are so strong longer term.
ReplyDeleteTEVA gap fill from a couple of years ago. Might try it again. Got stopped out last time.
ReplyDeleteSold out of CHK.
ReplyDeleteSold out of most of my positions
ReplyDeleteEvery time the past few months I've had a big up day like this one I've regretted not selling some positions.
DeleteBought some EDC instead of the single stock risk. Trying to see how this next move happens. I'm thinking the Fed is ready to make a move again so I'd like to pick up some banks.
ReplyDeleteI might just buy FAS. Seems a lower risk way to play banks but still have leverage.
DeleteFinancials have been dogs for a while. So probably not a huge rush
DeleteToo bad I sold out of HLX yesterday... Should have bought more of it instead of buying GDXJ. :)
ReplyDeleteReport from TD showing inventory levels coming back down from high levels towards normal range. Not there yet, but moving in that direction.
ReplyDeletehttps://tdsecurities.bluematrix.com/sellside/EmailDocViewer?encrypt=789c0b57-f6bf-439b-8963-1713f7274349&mime=SHORTPDF&co=tdsecurities&id=replaceme@bluematrix.com&source=mail
Back in CHK. This is craziness with oil and nat gas both up
ReplyDeleteNat gas and oil both on verge of breaking out here. CHK just announced that they "Significantly Improved Capital Structure" with recent transactions.
ReplyDeleteAdding more...
For some reason, BTE has not yet responded sufficiently to the recent jump in oil prices. A delayed response may be coming -- the highest breakeven oil cost among their 3 properties is $46, and oil is trading at $50 now... I just placed a buy stop limit order for more BTE at $4.4/$4.5.
ReplyDeleteThat order was filled at 4.44 this morning. Kinda unfortunate, given the action that followed...
DeleteThe copper price has made a perfect wedge on a 1-year chart. Which way will it break out? Look at the 5-year chart for an answer...
ReplyDeleteClosed DB pre-market @ 13.79 (+5.5%).
ReplyDeleteTWTR- Wild.
ReplyDeleteSEDG- Didn't do anything with this on Friday. I did of course consider selling my 2X trading shares at 17.30 the day before. :)
Investors (and black box trading algos) just don't like FCX. Both oil and copper are up a lot today, but FCX is basically flat. Well, if copper has indeed broken out of its wedge, then eventually it SHOULD show itself up in FCX's bottom line, and maybe THEN investors will take notice...
ReplyDeleteThe CHK chart shows some flattening out recently. Bought some at $6.29 after hours.
ReplyDeleteKeeping in mind that the market cares little to nada about my opinion, I sense a beautiful rally around the corner. 'Around the corner' being as soon as tomorrow and as vague as the second half of October.
ReplyDeleteDavid- When FCX decides to take off, not a single investor will be 'ready' for it. You're either already in, or will need to pay up big. That's just the way it is.
ReplyDeleteFCX has already tripled off the lows earlier this year, as have all the copper companies, so not surprising that it is basing now. I'm have some base metal companies on my watch list, but would like to see a spike down to buy. Maybe I won't get it, but I don't feel compelled to own metals at this time and would only buy on a good deal.
DeleteMaybe a lot of people are thinking like me?
BB, if you look at the 5-year copper price chart, it is basically at its bottom, so the rise in FCX from $4 to $10 was due to investors stopping to project copper price continuing down the 1-year trend and stabilizing in $2 - $2.30 region. So FCX at $10 is priced for copper in $2 - $2.30 region. If you think the copper price will at some point lift off this base (FCX said in one of its presentation that the all-in cost to develop a new copper mine is $3.30 and if no new mines are developed, in 2 years we'll have a serious supply shortage), then paying $10 for FCX is cheap.
DeleteAlso, FCX had a large exposure to oil until the recent sale of the gulf of Mexico properties, and oil was under $30 when FCX was at $4. Now oil is above $50 and it will keep going up, so that was another factor that brought FCX out of the abyss. But investors are still not ready for the copper price rising. And those who thought that it is bound to happen soon have already sold out of FCX after its long and nasty flat period of the recent months.
Delete"You're either already in, or will need to pay up big. That's just the way it is."
DeleteYep, it will definitely be like that. Many people got burned buying FCX upon its multiple false breakouts above $11, so the next time it breaks out above $11, most of the investors will probably be selling rather than buying. So when the price reaches $12, almost no one will be on board...
David, when I look at the TD reports, the copper companies are trading around NAV, using a copper price of $2.35. So I can see why people do not want to pay more until prices start to rise. Plus, we had the big bull in commodities last decade due to China, etc. But prior to that, Copper was below $1.50 for at least 30 years - http://www.macrotrends.net/1476/copper-prices-historical-chart-data so another reason to be cautious on long term copper prices. But I do agree with you that stocks like FCX will do very well if prices do rise.
DeleteInflation expectations are creeping up (the red line in the graph below):
ReplyDeletehttps://fred.stlouisfed.org/graph/?category_id=0&graph_id=87988
Just saying...
that maybe a long-term position in GDXJ is not such a bad idea? Or in copper, for that matter?
Seeing more adds for savings deposits these days - seems like the bump we have in borrowing rates is feeding through to savers. A good sign that the rate increase is taking hold.
ReplyDeleteIt seems that every large position I take without stops (i.e., as a long-term "value" proposition) starts with a 50% drawdown: oil stocks in the fall of 2015, UGAZ in late 2015. FCX is not there yet -- it would have to go down to $5 in order for me to experience a familiar degree of frustration. :)
ReplyDeleteCrazy huh? I have had zero luck with CHK and FCX this year. I think I had zero luck with them last year too. CHK just makes sense to go higher but people can't get past the leverage issue I guess. I still think you will see CHK over $10 within the next year.
DeleteYour experience tells me that scaling in is an absolute must.
CHK seems to be making a floor at $6. So I just placed a sell stop limit order at $6/$5.95 for the shares I picked up yesterday at $6.29.
ReplyDeleteGDXJ might be preparing for a small rebound rally. Placing a sell limit at $43.50 for the shares I picked up at $39.50.
ReplyDeleteI was tempted to get back on the long side but passed. Made a trade in ACIA that made money and lost money on CHK, again. I'm following Carl Futia's call for the short term direction of the market. Market leaders have been acting poorly so I think there's no rush to risk a lot right now...just keeping a close eye on things.
ReplyDelete"David- When FCX decides to take off, not a single investor will be 'ready' for it. You're either already in, or will need to pay up big. That's just the way it is."
ReplyDeleteYep, nailed it to a tee. Its the way the market, and life, is.
Bullish candlestick 'hammers' off the lower Bollinger Band in many, many sectors today. SPY, EEM, FXI, VT, even BTE + FCX! A strong positive.
ReplyDeleteEarly look at bank earnings this morning and most seem to be beating led by JPM with revenue beat and EPS beat of $0.19. Interest rates back to rising again.
ReplyDeleteThink the move into financials continues. Many of the small regional banks I follow are near 52 week highs.
Zero hour, 9 am.
ReplyDeleteIt's often 9 am est when these things happen.
DJIA futures +90 points, SPX futures + 10 points (easily taking the index back above 2140 at the open). FXI (China 'H' Shares) +1.13%. EEM (emerging markets) +0.76%. EWZ (Brazil) +1.45% and poised to set a new 52-wk high when it opens.
Following strong gaps up, indexes are pulling back. In many cases prices have declined to just below yesterday's highs, thus completing what many technical analysis proponents consider to be necessary 'gap fills.' I'm less convinced of its importance, but it's nice to get that out of the way!
DeleteLong EDC at $61.20
ReplyDeleteI believe a basket of VALE, CHK, BITA, spaced out over the next several weeks to months, should do well over the next 2-4 years.
ReplyDeleteSold EDC at $61.95
ReplyDeleteAll I know is 24 days til election and that will cause volatility...taking the approach of selling rips and buying dips until then and perhaps a week or so after.
ReplyDeleteLong some VALE at $5.655 avg
ReplyDeleteBought a little more BTE at $4.27 and changed my sell stop on CHK to a sell limit at $7. The floor seems to be in, and a spike up can happen any time...
ReplyDeleteHumor: Robin Williams
ReplyDeletehttps://www.youtube.com/watch?v=gGxdvkoYqrc
Watching Stranger Things on Netflix last night. It is set in the early 1980's and they turn the TV on and Ronald Reagan comes on talking about the trouble in Syria - here we are 30 years later and same things are happening - kind of funny how things never change, but also sad.
ReplyDeleteThat's a good show BB.
ReplyDeleteYeah, liking it so far.
DeleteYou guys see TCK this year? Jeez
ReplyDeleteThe base metal companies that did not have much copper in their portfolio have enjoyed a nice year. BHP also has a nice chart (it probably did not have the same debt problems as TCK and so its rebound is not as extreme).
DeleteI added some VALE today. When I look at that chart it strikes me as having a lot more upside than downside. Also, fundamentally, its a company that did great for 2001 thru 2012 and appears to be getting back to profitability through downsizing and switching to lower cost mines. Also even though China's buildout growth phase has cooled off, you have India coming on board and that should be a big driver of growth going forward
DeleteCheck out YIN when you get a chance. Basically the CME of China. I picked up a little today at $18.
ReplyDeleteIn case you missed this re FCX,the bear case on FCX.
ReplyDeletehttp://seekingalpha.com/news/3214376-freeport-mcmoran-rated-underperform-bofa-merrill-weak-copper-outlook
Re the metals, the one I am watching and hoping to get a good price om is NSU (and NSU.TO).
ReplyDeleteThey’ve really delivered with the Bisha Mine in Eritrea. Has a great balance sheet and a great income statement. The mine is coming into the zinc dominant part of the mine, just in time for a recovery in the zinc price. They took over Reservoir Minerals in Serbia, which is one of the highest grade undeveloped mineral deposits in the world. The knock on the company was always that they were going to do something stupid with all the money they made on the Bisha mine, and they answered that by doing something very smart. Their future is secured and they pay out a very nice dividend while you wait. Dividend yield of 5%. Had a bounce today on a drilling report, but still close to the low's of the last year and really, the last 5 years.
Back in NBY at $3.95 today. Tough to get many shares, but its trending toward breakeven. Found it from the reminiscences guy
ReplyDeleteBack in BITA at $26.9. Seems to like bouncing off this level so I'll give it another go
ReplyDeleteMedia doesn't like to post positive things about China but:
DeleteChina Auto Sales Increase 29% as Demand Thins Dealer Inventory
http://www.bloomberg.com/news/articles/2016-10-12/china-auto-sales-increase-29-as-demand-thins-dealer-inventory
Saw on seekingalpha retail sales up 10.7% as well - great for consumer focused companies.
Deletehttps://www.youtube.com/watch?v=17n8ja7G2VA
ReplyDeletePat Dwyer of Merrill Lynch believes a secular bull market 2013 (ie, that the secular bear market which started in 2000 with the dot.com crash ended in 2013). His team targets between 3500 and 5500 for the S&P500 over the next ten years.
I think Dwyer is spot on. The financial media is filled with talk about 'bubbles.' In my opinion, the only 'bubble' in the markets right now is a bubble in cash on the sidelines!
I don't get it -- now FCX is going up despite oil and copper being down. Maybe the smart money is accumulating now, on the day when no one wants to buy it?
ReplyDeleteSince I was fully invested, I decided not to wait for CHK to hit my sell limit at $7 and just sold at $6.85 the 1K shares I picked up at $6.29. Better to book $500+ gain while it is still there, and then have these funds available to buy some other bargain, if one appears. If oil keeps going up, then BTE will eventually follow, and so I'll still have some more profits to book...
ReplyDeletePDS indicated drilling services picking up
ReplyDeletehttp://seekingalpha.com/news/3215796-precision-drilling-brings-back-1000-workers-raises-prices-activity-improves
So THAT'S why HLX is rallying!
DeleteWas pretty busy last week and meant to mention I picked up X at $19.49. I saw a good note out of STLD on Friday that reinforced my thinking that steel prices are heading higher...see note from their conf call:
ReplyDelete"Matthew Korn
That’s very helpful. Let me follow on that then. You’ve got inventories that are fairly light, got lead times that are short and you got current price that doesn’t really track a lot in the way of imports. Do you think that we're potentially coiled for a pretty sharp rebound in pricing once the buying activity does return and would you think maybe that returning comes more into the new calendar year?
Mark Millett
I think we’re certainly at the bottom of the marketplace. And I think there's an inflection point around the corner and whether that is next week or whether it's a month or two, your guess is as good as mine. I would tell you that -- I don't know whether one week makes a market but the order activity and the inquiry activity just in the last week we're going to have is considerable compared to the last two or three months for sure. But if you look at the probability of price direction and an inflection point, there are several -- several factors that in my mind would suggest that the pricing is going to be moving up. The import arbitrage has certainly reversed itself. Import pricing today is very very unattractive. Hot rolled coil Q1 offers are probably 4.60 to 4.80 today, give or take a little bit on a delivered basis. The import light gauge coated products, the spread to domestic product was I think peaked right to 180 bucks, the standard to $100 today it would strengthen Asian market. And customers are starting to see that import deliveries now from the smaller countries where both have to pick up coils from different ports and deliver them to different ports, there is a certain unreliability there that, that’s creeping in. But there's no doubt that the import scenario is changing dramatically. And I think Russ would tell you that scrap prices has as likely reached the floor. So that's the eliminating that resistance to ordering steel due to any anticipation of falling scrap prices so that's beyond us. And I think scrap is somewhat at parity and with the Chinese billet conversion for Turkey. So that's probably going forward kind of a flat up a little type pricing environment and so there's no incentive for folks that hold off or in today from the raw material perspective. As you said supply side inventories are at very low levels and some may look at the fact well it's on a shipment rate basis two point four two point five months when I set a pretty low shipment basis. When the tide turns that suddenly is a very tight position for the rich folks to the end.
And then the raw material cost structure of the integrated mills, coke has gone orbital, doubled or more than double in the last few months. That's putting pressure -- pricing pressure on the integrated mills. Again three cases are going to remain in effect and limited in the import levels as well. And one other kind of side note, the speculators that tend to take large positions and they're the ones that tend to draw all the market pricing down in a trough like period that we're in today. Most of those folks have taken those positions. And so I think the pressure is off. So you have a model multifaceted kind premise that we’re nearing an inflection point."
X is the most leveraged in my opinion, to a sharp rebound in the steel market. I've been following this sector all year and waiting. I missed the bottom and regretted it but I think now is a good time to buy in for a shorter term rally. You have a few positive factors in play, but the two key ones are:
ReplyDelete(1) Stiff tariffs in place against China exports into the US and EU that are finally having some effect on inbound freight. China overproduced and dumped their supply into the US for several years and now its reversing.
(2) Steel imports has been a key topic in the presidential election and I think this continues through and past the election as both candidates support tariffs.
The balance sheet is ok and they're not going to be doing a secondary soon because they just did one. Also they have massive operating leverage if you look back to prior years when the cycle was on the upswing. 2008 was probably an outlier but these guys earned $7+ EPS from 2004 to 2008 on a fairly similar share count. If that happens again (lets say China tariffs help significantly and you also see a big buildout for India infrastructure) you could see this again and if you apply a 8x PE they could be trading at $50 to $60.
DeleteGood idea, Mike! I see that X does have a noticeable correlation with FCX over the past 6 months, so if it goes up, then hopefully FCX will go up as well. :) But just in case, I placed a buy stop limit order on X at $20.4/$20.5, so as to catch it on the way up in case it decides to move above the previous peak.
Delete