The driver for the long CSCO/INTC short SLV trade may well be the dollar. We've become accustomed to equating spikes in the DJIA with a falling dollar.
That's not always the case. CSCO/INTC will benefit from a rising dollar due to:
(a) Lower prices for commodities. The costs of raw materials used in manufacturing will be lower. In addition, consumers will be paying less for necessities (oil + gas, as well as anything made with oil + gas byproducts), and will presumably spend more on discretionary purchases.
(b) Both companies have a ----load of cash.
It's not unrealistic to couple SPX 1400 with SLV 25.
What happened to Elvis? A request for more Elvis Videos please.
ReplyDeleteCSCO needs to cut all the crap with servers and Info tech and electronic gadgets and get back to networking. THey need to put their cash to work and buy cloud-enabling assets now. I am shocked they have done nothing. THey have no vision and are probably too bloated to act.
Nice quote about Silver on stock twits:
ReplyDeletein early 1980 in direct reference to the Silver market collapse… you will note that Silver topped at 5056, dropped quickly to 3025, recovered to 3970, then was destroyed to 1080 and eventually 4 (that is $4 per oz.) for a total decline exceeding 90 percent.
"The reported reason for the decline was the failed attempt to corner the physical market by the Hunt brothers of Texas. Today’s equivilant would be a combination of JP Morgan and the small speculators through the ETFs. The CFTC stepped in January 1980 and hiked the margin requirements. The rest was history. The real reason for the decline was that Silver had no business being at $50, that Silver is a COMMODITY, and that commodities have boom and bust cycles.
Many, many investors got wiped out by the drop. During a meeting at the CBOT, a member made the statement, “Isn’t it too bad that not only the Hunts got wiped out, but little investors who had nothing to do with the manipulation also lost the family farm.” To this comment, and old-time trader made the statement…”Well, you must remember, when the cops raid the brothel, everyone gets arrested, even the piano player.”
Elvis- Not a problem, bro. I like Elvis, and will work to accomodate your request this week.
ReplyDeleteJust checked with the sister blog- you know, the one from another planet. No worries, still blacklisted. It's messed up, man- blacklisted for attempting to point out serious AH (after-hours) problems in stocks like Baxter/Boston Scientific, yet there is an ongoing discussion right now about another AH (Adolph Hitler)- no joke.
I woke up this morning and it was clear:
ReplyDeleteBroad market indexes go up this week, starting with the Nikkei, which may top (and remain above) 10,000. No comment on Australia or commodities.
Will this be a Tom Petty week?
ReplyDelete"Waiting is the hardest part", or "Free Fallin"?
Maybe both or neither?
Looking at the gold chart, I see it didn't hit my early July target of $1570, it did come within $0.30. I thought I'd seen $1570, but guess not!
PM's: So can the PM selloff continue if the dollar remains flat, or if the dollar experiences continued upside will US equities join the sellers party?
What's the real historical ratio for gold to silver: 15, 30, or something else? Assuming gold remains at $1495, that would put silver at either $50(30 ratio) or $99(15 ratio)...
ZSL gained 69% last week on the selloff, might be a good play if you think PM's are overbought? Or were we witness to something else more sinister last week?
Throw an overlay chart up with S&P and gold on there, it provides some perspective.
ReplyDeleteIf the Euro crashes from here, what does that mean for the dollar? I expect it would go up in value, reversing the rally of anything and everything in our currency.
ReplyDeleteGasoline prices will fall with a stronger dollar, so Americans can again begin driving our humongous SUV's all around?
Maybe I'll wait till next week before filling my vehicle again.
Copper - Looks like it's on the hairy edge of falling off a cliff, wonder if Dr. Copper is a decent historical indicator of future business activity???
ReplyDelete2nd, You are welcome to use my sign on over there. I doubt i will use it and they could use your help. Only draw back is that really stupid name bobbyo.
ReplyDelete2nd - What exactly did you get banned for? Must have missed it.
ReplyDeleteRB - So you are the guy behind that really stupid name.
Anyone - Does the guy named Craig on the other site post here under another name?
rb- That's OK, man. I try to post helpful comments, such as the suggestion about taking partial profits on SLW @ 47, but no one really listens anyway, so you could say my absence will not be missed. If one posts a comment that goes unread, does the tree make a sound?
ReplyDeleteCraig posts under farfetched, aka ff.
ReplyDeleteillini- I got banned for posting comments that were too well-written.
And right now, I need to cut the grass and pull weeds that are too overgrown. Catch up later...
ReplyDeleteRoBear: the silver bull market died after silver reached $50 because that move coincided with the end of the US deficit and the start of 20 years of budget surplus. Right now, however, we are at early stages of MANY years of HUGE government deficits and an unending growth of Debt/GDP ratio deeper and deeper into the uncharted territory. This has never happened before, and so we shouldn't use any historical analogies now.
ReplyDeletePossible sharp inflation pressures after the end of QE2
ReplyDeleteSubmitted by DavidV (81 comments) on Sun, 05/08/2011 - 18:22 #85530
I just realized something, which I thought was important to share. Consider the following excerpts from John Hussman's weekly letter a couple of weeks ago:
"Alternatively, with the monetary base now exceeding 16 cents for every dollar of nominal GDP, any external upward pressure on interest rates (that is, not produced by a Fed-initiated reduction in the monetary base) would quickly provoke inflationary pressures. ... In order to offset the inflationary pressure from a slight exogenous increase in interest rates, the Fed would be forced to respond with a sharp tightening in its balance sheet. ... Based on the very robust relationship between short-term interest rates and the monetary base, it is clear that a normalization of short-term interest rates, even to 0.25-0.50%, would require the Federal Reserve to fully reverse the $600 billion of asset purchases it conducted under QE2."
It seems that the mainstream thinking on Wall Street now is that the end of QE2 is going to be a nonevent, because even if the T-bill yield rises to 2% because of no more treasury purchases, the economy is strong enough to withstand it. However, if Hussman's math is correct (and I think it is), then the end of QE2 and a rise in short-term interest rates coupled with no changes to the Fed's balance sheet (they suggested in their April meeting that there will be no balance sheet reductions in the near future) will give us very strong inflationary pressures in 2H 2011, which can send PMs to the moon. So let's watch the short-term interest rates carefully, and if they start going up this summer, then don't forget to go all-in on PMs right away.
A guy on BC today had this chart and said it was scary, not for inflation but because of deflation:
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$IRX&p=D&yr=3&mn=0&dy=0&id=p85546392470
DJIA futes +67, NDQ futes +11.50.
ReplyDeleteOff to a good start.
Don't forget the Sharks play the Winged Wheels tonight @ 5:00!!!
ReplyDeleteCan we dispense with the off-topic crap, please? The name of the game is 'Trading Topics.' Not 'predatory fish and 60s stock cars.'
ReplyDeleteHa ha. I don't even know who the Sharks or Winged Wheels are. Maybe Mark could make it on-topic by stating what are the odds. Then again, I don't have a bookie.
ReplyDelete2nd, you should put a "smiley" after such comments, so that some lurkers won't start hell again because of you repeating the behavior of someone who banned you...
ReplyDeleteI wasn't joking, David.
ReplyDeleteI have NO sense of humor after 375 mL of Nadurra, my friend.
ReplyDeleteIn fact, I'm unable to sense anything at all.
ReplyDeleteNDQ and SPX futes +0.54%.
ReplyDeleteIllini- Here you go. You can place bets here...
ReplyDeletehttp://www.covers.com/sports/odds/linehistory.aspx?eventId=40975&sport=NHL
BC's WIR is finally up. After the great hiatus he said it would be posted on Saturdays. One was. Lately, I've been reading mostly the Intro and Summary but it's still good for a few charts if you can wade through the many that nobody probably looks at.
ReplyDelete375 mL of Nadurra, at 120 proof, is equivalent to 12.5 shots of 80 proof. If downed in an hour, would result in a BAC of 0.31.
ReplyDeleteEveryone is surely here today.I wonder if team has survived Vegas. I can't help to think W.W.E.D.
ReplyDeletehttp://www.youtube.com/watch?v=Rptu0lKy6tY&feature=related
2nd! Cool, thanks for the tip! How much is in a shot, I've forgot?
ReplyDeleteIn other words, I should be dead.
ReplyDeleteA shot=1.5 oz=45 mL.
ReplyDeleteBack in college I got my one and only DUI. BAC was 0.38.
ReplyDelete"In other words, I should be dead."
ReplyDelete0.375 mL of Nadurra is indeed a lot. What prompted you to be so rough on yourself?
I guess such a level of intoxication can be an excuse for being so rough toward the owner of this blog...
0.375 mL is nothing, bro- a few drops.
ReplyDeleteYou deserve it after mowing lawn and picking weeds.
ReplyDeleteI live in a condo now so I don't have that excuse. how much is a bottle of 13.5% wine?
ReplyDeleteHang Seng up +0.5%. It could all reverse by morning. But I doubt it. In fact, it may be +3 digits on the DJIA by then.
ReplyDeleteVery good visual organizers of the future or why I would rather own a gram of BIDU or facebook over an Ounce of silver.
ReplyDeletehttp://ansonalex.com/technology/4-infographics-about-online-trends-internet-usage-and-social-media/
Hang Seng +0.75%.
ReplyDeleteShort Euro? So far the dollar is only slightly off, but if Greece defaults I'm sure the euro will take a tumble. That means a higher dollar in comparison, and we all know what that means if the dollar short covering gains momentum.
ReplyDeleteSo I lean towards inverse ETF EUO this evening.
Buy American? Big AAA? Phil Harris said it all as a poker player in late 1940's.
ReplyDeletehttp://www.youtube.com/watch?v=r7dzDGrUOqY
I've heard no less than three accounts of the ending of OBL's life, he was: 1) Killed, 2) Assinated, 3) Murdered.
ReplyDeleteI tend to agree with #1, but in any case I'm glad he's gone. Seems like Obama got the job done to me.
CP- It's 1, and anyone who doesn't understand that is naive.
ReplyDeleteYou guys did see where GS reversed it's commodities call on Fri. I'll sleep better next to Lloyd...He's cutie in a RB sort of way...
2nds got to be asleep...Sharks blew it, lost 4-3. Back to Detroit.
ReplyDeleteGS - Yes, I did actually see something flash by on the screen but didn't get a chance to analyze it.
ReplyDeleteThe Dollar bounce could've been just that a dead-cat bounce, have to keep a close eye on which way this goes but I wonder if the Euro could possibly have any upside remaining since we're talking once again about potential PIIGS governmental default? I know, I know, we've been through this how many times???
Guess I'll just have to log in early enough to find out...
Hey guys....weekend was a blast...expensive one tho...just got back and watched 60 mins...fantastic piece. Mitk earnings in am...oh boy
ReplyDeleteCSCO's moving in the right direction.
ReplyDeleteI was wrong re the Nikkei, and Europe's selling off as well.
ReplyDeleteNone of the above matters, so long as US indexes move up today.
This comment has been removed by the author.
ReplyDeleteReally good news out of MITK this morning:
ReplyDeleteI wasn't expecting this much revenue growth and earnings this soon. The addition of BAC + COF is huge.
*Bank of America confirmed as new customer
*Capital One confirmed as new customer
*90% YoY revenue growth
*$0.025 quarterly earnings
*Significant cash raise
*Confirmed Nasdaq listing
Japan announces no change to the nuclear energy portion of their strategic energy plan.
ReplyDeletemorning guys!
ReplyDeletethx for the update on MITK tof...could use some good news today.
does anyone use a laptop+full size monitor for trading? if so, what config?
CL is super thin this a.m. at the open, 4-5 ticks wide
ReplyDeleteERO - Stink bid @ $16.05, expecting monkey business as first order of priority this morning. Prepared to raise that bid should things go the direction anticipated.
ReplyDeletere: MITK - wonder if we are going to take a haircut today due to the private placement???
ReplyDeleteJB - The private placement is going to keep a lid on the upward movement today, but this is still a $50 stock in 2-3 years in my opinion. This huge revenue growth comes without them being able to realize their revenues from Chase yet (b/c Mobile Bill Pay hasn't been launched) per the conference call. When these revenues are finally realized they will be at $4 Million - $5 Million per quarter.
ReplyDeletetof - sounds right. been on a couple FSI calls this a.m., given how hot the space is I doubt these guys will be public in 2 years!
ReplyDeleteSo it looks like 29M shares fully diluted?
ReplyDeleteWhat a shock. BAC back to the bottom of the channel.
ReplyDelete2.85M shares @5.25
ReplyDeletetotal circle jerk in the ES today
ReplyDeleteJB- 29M shares is the total now, I believe.
ReplyDeleteah, yeah I guess...23M+ per the f/s and then the 5.25.
ReplyDeleteinteresting that MITK is up this a.m.
ST-
ReplyDeleteLarge and small speculators in the major stock indexes bumped up their exposure last week by a sizable amount.
The nominal dollar value of speculators' net position in both the full contracts and e-minis for the S&P 500, Nasdaq 100 and DJIA jumped to $29.6 billion. That's the highest since December 2008 and one of the highest all-time.
There have been four other times in history that have matched or exceeded this kind of exposure for speculators. None of them were particularly appealing.
* Late November 2000 through mid-March 2001 (stocks tumbled for the next few months)
* Mid-November 2004 through mid-January 2005 (stocks chopped lower for the next few months)
* Late October 2006 through late February 2007 (short-term gains were given back in late February)
* Most of December 2008 (stocks tumbled for the next few months)
......
The S&P 500 SPDR (SPY) nearly put in a weekly "bearish engulfing" candle pattern, which has consistently led to negative returns going forward.
This hasn't been a frequent occurrence, but the ones that have triggered have led to more weakness than strength during the next month.
1 month later: max loss: -4.3%, -7.5%, -6.5%, -7.4%, -3.2%, -12.2%
JB / Mark - yeah they confirmed 29 Million fully diluted shs after the capital raise. I believe they will be doing about $.03/share this quarter and then Chase revenues will be able to be realized in q3 so they will do about $0.10 that quarter. Then BAC and COF should be on board and I would expect them to do about $.20/share in q4.
ReplyDeleteThe other Cisco (SYY) is up over 12% today on earnings. WSJ says "May be tough for Cisco to match Sysco this week." CSCO reports on Wednesday.
ReplyDeleteI wouldn't normally say this but I would highly recommend buying as much MITK as you can. The major worry I have about this company is dilution, but I think this will be the last of the dilution this company will see. I'd advise listening to the call to understand just how big of an opportunity this company has in front of it. They said they are seeing significant opportunities in a variety of industries with their image capturing technology, which will open up even larger opportunities.
ReplyDeleteI personally think this will be in the $50 range in 1-2 years.
CADC - Capitulation?
ReplyDeleteHAYN - Double top, or can it break on through to the other side? I say not.
ReplyDeleteGotta go play tractors now, scream at you guys later!
ReplyDeleteAnother report showing housing weakness posted today:
ReplyDeletehttp://finance.yahoo.com/banking-budgeting/article/112698/housing-crash-getting-worse-marketwatch;_ylt=AgJ.9m6UUb5JB8Q0DXl3Hk27YWsA;_ylu=X3oDMTE1YWsxYTdnBHBvcwM1BHNlYwN0b3BTdG9yaWVzBHNsawNob3VzaW5nY3Jhc2g-?mod=bb-budgeting&sec=topStories&pos=2&asset=&ccode=
MITK - Nice! Good job guys!
ReplyDelete5/5 Alert from Picture of Power Momentum Investing-
ReplyDeleteTZOO - Mapsyntex buy signal given at $75.03. Groupmarketing/advertising. New Service: Local deals.
If this continues to be "in play", 10 week moving average at $70.45 should contain selloff and provide rocket fuel.
Picked some up at 73.70 and will add.
MITK-
ReplyDeleteNow that's a chart that we should all be following. Screw all of these oversold and unloved plays.
by the way, congrats to David on have the cojones to buy ECUXF at $.7
ReplyDeleteSeems like the message is: "if we can't trust the dollar or the euro, we'll flee to PM's".
ReplyDeleteWe'll see, I think it's a justified response although it's a tossup in comparison with value-added income-earning equities in consideration of the shenanigans but perhaps there's a method to those shenanigans???
REDF possible chart setup w/ 50% upside to recent highs.
ReplyDeleteRisk/reward may not be as favorable as the chart suggests as 10wma is @ $10.50 and 200 day is around $5. That's quite a bit of downside should earnings disappoint.
GPL - Having sold my GPL @ $3.27 sure is costing me, I hope all the PM bears are proven right and I can get back in considerably lower.
ReplyDeleteSo far, that's just not happening....
cp - You still follow GMO?
ReplyDelete"by the way, congrats to David on have the cojones to buy ECUXF at $.7"
ReplyDeleteThat was easy, TOF -- the good things for that company have already happened (jump in gold and silver + expanded production + expanded resources), and we just need to wait for the corresponding reports (earnings for 2H 2011, updated 43-101, economic feasibility study) to make it official.
But YOU are the man, going all-in on MITK for which the good things *might* happen. This is the kind of risk that I would not have taken. So I am actually pretty conservative in my investment decisions. :)
I hope Bill is right about silver and the current bounce will be sold to a new low. I still have buy limit orders for 10K shares of ECUXF at $0.65 and $0.6, and I want them to be hit, so as to bring my total number of shares to a nice round 200K.
ReplyDeletePANL- 7 week base
ReplyDeleteUTEK-
Noble Financial: growing momentum in orders for photolithography tools for high brightness light emitting high diod mfgrs. UTEK has orders from 5 of the top 10 Chinese HB-LED mfgrs. and is expected to pick up orders from 3 or 4 more. Noble sees UTEK 2011 sapphire tool shipments up 400%. This has IBD written all over it.
The Fed came out today with a new research article (http://www.frbsf.org/publications/economics/letter/2011/el2011-14.html), which has the following abstract:
ReplyDelete"Inflation has risen of late, reflecting higher prices for many commodities. The inflation rate is likely to peak around the middle of 2011 and then return to an annual level of about 1¼ to 1½%. A sustained period of high inflation is very unlikely and the Fed will act quickly and decisively to ensure price stability. The following is adapted from a presentation made by the president and CEO of the Federal Reserve Bank of San Francisco to Town Hall Los Angeles on May 4, 2011."
I got really curious, after reading that abstract, as to WHY they think inflation will peak in mid-2011. Here are some excerpts from the article:
"That brings us back to the question of why commodity prices have risen so much. Some commentators have suggested that the Fed itself has contributed to the run-up by keeping in place excessive monetary stimulus. According to this argument, the Fed’s policy of very low interest rates and sizable securities holdings are fueling speculation in commodities. Economic theory teaches us that lower interest rates will boost asset prices, including commodity prices, all else equal. But it is unlikely that this effect can explain more than a very small portion of the huge increase in commodity prices that we have witnessed (see Erceg, Guerrieri, and Kamin 2011 and Frankel and Rose 2009). Economists at the San Francisco Fed (Glick and Leduc 2011) recently looked at how commodity prices reacted when the Fed announced new policy actions to stimulate the economy. If Fed policies were responsible for the commodity price boom, then we should have seen those prices jump when the Fed announced more monetary stimulus. In fact, the researchers found that, if anything, commodity prices fell after new policy announcements and were not pushed higher by news about Fed policy. So, I don’t see any convincing evidence that monetary policy has played a significant role in the huge surge in commodity prices."
I don't know what that guy was smoking, but the charts clearly show that commodities took of on their parabolic run after Bernanke's Jackson Hole speech. If the Fed is still in denial of that fact, then they are not planning to restrain the run-up in commodity prices in the near future, and so the commodity boom is set to continue.
Kyle - GMO - Yes I traded some today, why do you ask?
ReplyDeletecp - I've moved away from most swing trading, but was just looking @ GMO, PAL, GSS, DNN & EXK today. Wonder how Shark is doing???
ReplyDeletePicked up some natty 10.77. My "indicator" GAZ appears to be quite oversold and may be due to lead a rebound in the near future.
ReplyDeleteHaven't heard a word from sharkie, he went cold turkey on us.
ReplyDeleteGMO - I still have a huge position. Waiting for the mine permits to come through, they keep getting pushed out... Now EOY is target.
So I buy oversold and sell the pops.
cp - Also, TC came up on one of my scans...so looked at GMO
ReplyDelete8:57AM Thompson Creek Metals announced its intention to offer, subject to market and other conditions, $300 mln of Senior Unsecured Notes due 2018 (TC) 11.26 : The cop intends to use the proceeds from the notes offering to fund development of its Mt. Milligan copper-gold mine and for general working capital.
Just got back. Crude up almost 6 bucks? Crazy...
ReplyDeleteTC - Yeah, no surprise really. Wasn't aware of the news, looks like a good entry event if you believe commodities aren't likely to crater.
ReplyDeleteAh, bell rang... So how'd we do? Survey says: Not so bad...
ReplyDeletePicture perfect weekly hammer for CSCO 2 weeks ago. May have to buy some pre-earnings calls. She may be good for 1 or 2 bucks in May/June even though she's a shitty stock.
ReplyDeleteCara Community - Man, the dialog over there sounds more and more like a commercial everyday.
ReplyDeleteEvery day it's always about being on the doorstep of yet another tragedy and in so many words: the only way you're gonna make any money is to put it in their hands...
CSCO closed $17.60. June $16 calls are $1.78. Are you kidding me????
ReplyDeleteCSCO trades flat for 6 weeks, you lose 10%.
CSCO trades to $19.50 (PE of 11) post earnings, you gain 100%.
Hmmm......
PM's pullback - Well yeah, for silver, the damn RSI(7) was frickin in the clouds like 90 or something at $50....
ReplyDeleteCC- Absolutely killed my "6th sense" w/ their gloom and doom. Articles, articles, articles....all written by guys w/ little or no trading experience receiving a salary of under 6 figures.
ReplyDeleteIt all goes back to trading not what you THINK, but what you SEE.
Kaimu's end of the world financial statements are highly entertaining and alarming, yet individual stocks continue to head higher in light of armageddon.
Screw tending to the farm now. When Armageddon hits in 2013 (just to catch everybody off guard), you'll have plenty of trading profits to pick up all of the foreclosed farmland in Marin county for pennies on the dollar. At that point, Kaimu will have sold his farm in Hawaii and will be living in a Penthouse on park avenue as he rejoices in America's newfound prosperity.
As always, patterns can change on a dime.....
Jesse that cannot be true on csco calls. You sure it is not May?
ReplyDeleteDavid - thanks but the writing is on the wall with MITK. I researched it and found that they are making $0.15/deposit or $1-$2 annually per subscriber for their mobile deposit technology. And they just signed on USB, PNC, and JPM in addition to USAA (which at the time had already had 4 Million checks deposited...a large number for a bank with 1/30th the assets of JPM) and confirmed they had 5 of the top 10 banks signed on to their service. Add to this that their margins are 85% to 90% on each deposit and I figured they have the potential to be making $50-$100 Million in net profits annually just on mobile check deposit.
ReplyDeleteAnd apparently their mobile bill pay product is now also gaining traction (on the call they said 1 of the top 10 banks is testing it and that they are charging an annual fee plus a transaction fee). I honestly think this is the best investment opportunity in the market that I have ever seen. So I don't mind holding a huge position on it...the hard part now is remaining calm and holding if it goes.
Wow your right. There is only a 30 cent premium on the July $16 calls at 1.90. How hated is this stock? I am thinking of rolling my csco position into calls. There is less risk!
ReplyDeleteRB- You are correct. July CSCO calls are a bargain as well. F%@K making 5% on the common. Go for 100% w/ the calls.
ReplyDeleteW/ that weekly hammer 3 weeks ago (I mistakenly said 2 earlier) and the 3 tests of the 50 day the last 3 sessions, this has 19-20 written all over it.
If we can get a sloppy, ambiguous, nonchalant, uninspiring CSCO chart pattern heading into earnings, it will rocket (relatively speaking).
ReplyDeleteVery best case scenario (and I think 2nd would agree), CSCO trades and closes below its 50 day at 17.49 heading into earnings and thus shakes out any momentum/eps players ahead of earnings. Then...bam!!! A hugely gigantic, news inspiring, euphoric spike of.....3-5% lol:)
TOF: Can you please call the MITK investor rep and verify your calculations with them? That is, ask them how many clients they currently have, how many clients they expect to have at the end of 2011, how much revenue each client brings, what their profit margin is, and what they think their earnings are going to be at the end of 2011. Thanks! I did the same thing with each company into which I invested more than 5% of my port...
ReplyDeletenew post
ReplyDelete