Saturday, July 9, 2011
07/09/11 Monday Forecast
Two categories of complacent traders running errands and dining out this weekend, oblivious to next week's approaching storm.
(a) Bulls shaken out at the lows in late June, and left behind during the +100 point rally in the SPX.
(b) Bulls who sold at Thursday's close, confident they'll be able to reopen positions at much lower prices next week.
You'll find both groups downing drinks at the bar with a hint of 'smug' (and deservedly so). This state of mind, however, tends to last only as long as the buzz from the alcohol. Beginning Sunday evening, the indexes will have the winds at their backs:
(a) Bad news is now good news. No news is good news. And good news is also (once more) good news.
(b) Alcoa kicks off the earnings parade Monday night. It will be good news.
(c) With a ----load of investors now on the sidelines waiting for 'overbought' conditions to clear, the market really has no choice but to become even more overbought. The perfect opportunity for blue-chip value stocks to clear resistance levels.
Subscribe to:
Post Comments (Atom)
illini- I would add AA, GE, INTC, WFC, AMAT, MU, AAPL, GOOG, TM, HMC, CAJ, SNE.
ReplyDeleteIllini- TBT,APKT,AKAM,KOG,CE,HEK. Thanks!
ReplyDeleteMark, I'll give you KOG & BEXP now because I did them earlier and wrote them down and there is an Intermediate term play available for both:
ReplyDeleteBEXP - Bull 9 ($31.18, -.03 Friday) with Bottom Spotter @ 24.71 June 20 (+ 26.2% since then). IT trend in progress above 29.59 with that as a stop and a target of 37.39 for a good G/R ratio of 3.91.
Position size for a long taken now with a portfolio of $100,000 and a 2%/$2k risk is 966 shares. With 3% risk, size = 1450 shares. For a $1M port just multiply those sizes by 10, etc..
Oh, the Position Sizing tool says stop on BEXP IT should be 29.11 for those conditions.
ReplyDeleteKOG is also Bull 9 ($6.4, -.11) with Top Spotter @ 7.7 Mar 1 (- 16.9% since then). IT bullish up-trend in progress above 6.14 with that as a stop and a target of 7.4 for a good G/R ratio of 3.85.
ReplyDeletePosition size for a long taken now with a portfolio of $100,000 and a 2%/$2k risk is 6061 shares. With 3% risk, size = 9091 shares. For a $1M port just multiply those sizes by 10, etc. Stop is 6.07, target 7.4 for this set-up.
2nd,
ReplyDeleteAA ($16.38-.11)is Bull 9 with a bottom spotter @14.96 June 20 (+12.5% since then. IT bullish up-trend in progress above 16.10 with that as a stop and a target of 18.13 for a good G/R ratio of 6.25. The ST and LT G/R ratios are poor but all time frames are bullish .
Position size for a long taken now with a portfolio of $100,000 and a 2%/$2k risk is 3448 shares. With 3% risk, size = 5172 shares. For a $1M port just multiply those sizes by 10, etc. Stop is 15.80, below the "trending line" at 16.10 , target is 18.13 for this set-up. Potential gain from here is $6064 with the risk being $2000. (The G/R previously was 6.25 if you would have entered at 16.06 on July 1, the last signal date.)
GE - Bull 8 (18.99,-.31) meaning a short term rally within IT pullback. LT is bullish above 18.48 since last signal 6/29. Target 21.52.
ReplyDeletePosition size for a LT long taken now with a portfolio of $100,000 and a 2%/$2k risk is 2381 shares. With 3% risk, size = 3571 shares. For a $1M port just multiply those sizes by 10, etc. Stop is 18.15, below the "trending line" at 18.45 , target is 21.52 for this set-up. Potential gain from here is $9035 with the risk being $2000. (The G/R previously was 4.96 if you would have entered at 18.45 on 6/29, the last signal date). Any G/R ratio above 3.00 is still considered good.
INTC - Bull 10 ($23.09, -.14) but there are currently no set-ups. The G/R's are puny because price has left the ideal buy zone for all time periods. LT target is only 24.22, IT 23.88. Nuff said.
ReplyDeleteWFC - Is messy! ($28.30,-.36), Bull 1 meaning a ST up trend in an extended bear market. Friday saw fresh ST and IT sell short signals, however. IT was at 28.33 with target of 25.3. Could flip again within pennies.
ReplyDeleteAMAT - Also a Bull 1 and messy ($13.10-.34). Friday saw a fresh IT sell short signal at 13.40 with a target of 10.37. That's a G/R of 9.10. LT is also bearish. Only ST is bullish, which is not the algo's strong suite.
ReplyDeleteMU - ($7.68-.14). Bear 10, an extended bear market. Worse that you can get but there is a bottom spotter at 7.20 on 6/27. It's so far along the bear path that the sell short G/R ratios are poor. Only for the counter trend gambler right now. LT bear target is 6.46. Current stop at 9.20. Sell signal was way back at 9.45 on 6/2.
ReplyDeleteMark,
ReplyDeleteTBT - Bear 10 (33.38, -.93). Top spotter 41.54 2/9,-19.6%. Short term turned bearish Friday with a sell short signal at 33.64 with target 32.28 for a G/R of 4.23 at that point. Still at a 3 G/R with position size of 5405 and stop at 33.75 with 2% risk on port value of 100k. Other time frames have a poor G/R for selling short.
ILLI, I like the thinking behind the setups.Is this a service?. What does it say for my parabolic list if it even can do those. SODA,JVA, MPEL SPRD FIO conn DFS NANO. Thanks?
ReplyDeleteNext Week. Keep in mind I believe there is a meeting on sunday concerning raising the debt limit. If a deal is made market could rocket on monday. No deal may cause a lull, I believe all this should have no effect on the market but bloomberg headlines will give a reason. "Dow up 300 on debt limit raise." When really it is up 300 on a short squeeze!
ReplyDeleteHere is a take similar to what we have been saying on here. The best way to say bye bye to this recession is to say eat shit banks no more money. The road to prosperity is to make a new energy policy combined with mass transportation infrastructure.
ReplyDeleteUPG D5779 UB1280-F2
RB - It's a service called Stops & Targets. Coverage is the Russell 3000 and only the last three you listed are covered. Those are Bull 10 with only short term signals for the last two on Friday: DFS is a counter trend sell and NANO is a buy at 19.84, on Thursday actually, but no G/R ratio is calculated because no upside resistance is in sight.
ReplyDeleteI only subscribe to the lowest level of the service at $30/mo which gives me the 3 major indices. It goes up from there to pretty high levels. Next level adds four futures (E-minis + USD). I don't go there.
DFS - Bottom Spotter in place since June 8,2010 at $12.11. IT and LT have no G/R presented. Like you said RB: "parabolic". LT went bullish on Aug 27, 2010 with a buy signal at $14.08. Gain is 92.6% since then.
ReplyDeleteAAPL - Bull 10 and long in the tooth. Not much there to get excited about. G/R's are very poor at this point. No spotters in place. It/LT target is 363.1 and we're almost there already. Hitting would be a sell partials to protect profits, I think. Stops are 353 /313.
ReplyDeleteBTW, 46% of the population is rated Bull 10 right now. 14% is Bull 9, 3% Bull 8.....
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/09/BAI71K83MG.DTL
ReplyDeleteI'd like to see one candidate run on a platform that I think all San Franciscans would vote for, but are too politically correct to mention:
Clean Up The City
(a) Stop funding the welfare programs that attract runaways/transients, and drive the homeless back to where they came from.
(b) Use the money instead to clean up/maintain the filthy streets/sidewalks.
If City Hall did nothing new apart from the above for the next 4 years, it would be an entirely transformed city.
Send them to Bullhead!
ReplyDeleteGOOG - Bull 2 (532). It's in an extended bear market but within that it is in an uptrend, short and intermediate terms. Top spotter at 643 Jan 19, declined 17% since then. The most recent signal last week was a LT sell short with a stop at 564 and a target of 436. A position size of 63 shares would give you a profit $6043 at a risk of $2000 (G/R 3) for this LT short trade.
ReplyDeleteI gotta say I disagree with the bullish stance. I think we go below 1250 in august first and if Econ conditions pick up then it's bullish. I'm personally all in cash and gonna wait for bargains.
ReplyDeletetof- Thanks, I appreciate hearing your take.
ReplyDeleteI have to admit, I'm still shocked by the women's soccer match today. To go from getting screwed royally by the ref and the chicken shit stall tactics by the Brazilians, and the fans booing Marta and rooting for the USA... to tie the game with a few seconds left...wow, unreal.
ReplyDeleteIllini- Thanks Buddy!!
ReplyDelete2nd ultimately we prob go higher on back of further European bailouts which will continue to trash the value of all Paper currencies...so perhaps the best play is ultra long gold and gold equities...at some point prob in 2012 or so though I think we hit the wall on these bailouts and have another problem on our hands...thats why I think we grind lower for several years after hitting 1400 to 1500...prob to 1000. I think we can some nice trading opportunities ahead of us.
ReplyDeleteMark, as far as oil I have the following on the radar tomorrow based upon Stops & Targets trading tool/algo, full service for more than 24 hrs (they being generous?).
ReplyDeleteBEXP, GEOI, PXD, UPL & KOG. Other things: APKT, MDRX, DAKT looking good. HEK does not compute now except as a counter trend sell. The first few are a lot of shale oil on the table ready to rise. All those are bullish IT/LT with low risk.
2nd, all the Japanese ADR's do not show up in the Russell 3000. Sorry. I drive a Honda Civic and so does my son, when he does not have us all loaded into his older Mazda van with cargo. He wishes for a Honda van in his future. He was brought up on Toyota's and a VW Rabbit before that.
ReplyDeleteHMC is now on a rip up as is TM.
Illini,
ReplyDeletetried to buy HMC on the pullback from the Tsunami, but was hoping for an even better price and missed and am now in that difficult position of either paying up or letting go of what I think will be a good long term stock.
Wonder what's up with natty?
ReplyDeleteIMAX - Watching this one, for various reasons.
ReplyDeleteS2 is 29.75 for BEXP today.
ReplyDeleteXLE opened below S2. That's unusual.
ReplyDeleteRBY - Re approaching recent low, will buyers appear?
ReplyDeleteCould be a good entry, I'm just not sure...
Looks like BAC is going to make a new low.
ReplyDeleteItaly having trouble today, what happens when France comes under the spotlight? Then the US???
ReplyDeleteThis all rather seems contrived, first we're told banks are fine and now, slowly, they begin to admit banks are not so fine... We knew that already, right?
BAC - Maybe their share price is getting a little help from the FED today?
ReplyDeleteSure wish I'd bought more SVM.
I think it's unwise to buy any attempted rally here. I think we're setting up for a drop to the 1,230 level in a few weeks...we will probably get a bump higher for a day on debt raise, but then we will drop much lower.
ReplyDeleteIssues in Europe are starting to spread faster than people are expecting...CDS spreads are getting wider and wider in Italy and Spain which are much larger issues for the economy. I wouldn't be surprised if Gold goes to $2,000 this year.
ReplyDeleteI have some more cash to move into the market, will add to my longs over the course of the week. I think positive earnings news and continued growth in the developing markets will take us higher.
ReplyDeleteNew lows for the energy stuff I follow.
ReplyDeleteJB- I agree. Have plenty of cash here and will look to add longs in the next week or 2. GL today.
The main issue I've been having with the market lately is how ridiculous these valuations have gotten on these high fliers...it just feels to me like there is way too much complacency in the market. How can anyone possibly justify the valuations on NFLX, AMZN, LULU, JVA, LNKD, all of the Chinese internet plays, etc? Some of them are awesome companies but the multiples on them are absurd. It's not like we are in a riskless world here. There are a lot of risks out there so to be paying these multiples is crazy. And somehow I think this mentality has spread across a large swath of the market. Cyclical companies should not be trading at 12 to 15 multiples after earnings have ripped tremendously higher...that's when you should be paying single digit multiples because the risk is to the downside for earnings.
ReplyDeleteI'm standing to the side for a little while until we get much lower prices on stocks I really like.
thx bro, I'll shoot a note after and send his contact details as well.
ReplyDeleteGPL - "11-Jul-11 08:23AM Great Panther Silver initiated with an Accumulate at Global Hunter"
ReplyDeleteHolding up well today, P/B is a bit high for my tastes but this number is subject to revision as drill results are published (big if).
need to see if the ES holds 19, if not I'll wait a bit longer to add to my longs. Vol is pretty darn light for this large a move down, I think this is quite bullish
ReplyDeletenext stop would be the MP single at 17, then the Person level at 16, don't think we will see 16
ReplyDeleteMonday forecast? WTF.
ReplyDeletelooks like we're getting some support here at 19, so unless Barry says something stupid (I wish he'd just STFU) we move back higher
ReplyDeletewell, scratch that, now I need 16.50 to hold otherwise we can go below 10
ReplyDeleteVolume. Yeah, it's crazy how some of the stuff I follow sliced through support on no volume at all. There are NO buyers out there at all.
ReplyDeleteBEXP - "S2 is 29.75 for BEXP today."
ReplyDeleteWe're there in spades! Wonder where S2 is likely to be tomorrow?
Anyway, I've got a stink bid in around $25 and who knows, I might get lucky... ;)
I'm outta here for the day, dialing into a "how to find a job when you've been kicked to the curb and are over 50", bet it is going to be as fun as a trip to the dentist.
ReplyDeletegood luck boys!
here is the first line from the webinar: age is an attitude not a number.....just freakin' shoot me NOW
ReplyDelete"WTF" - This three letter acronym simply doesn't represent a forecast by my definition! ;)
ReplyDeleteShoulda gone short Friday, but we never made it back to the upper trend line (1440+).
I guess we bounce off the 50SMA then proceed to retest recent lows. Italy is a bit bigger deal than Greece, so are the ECU buffoons gonna drag their feet as long or get to work sticking their fingers in the various dikes?
I'd like to visit Holland(again); Wooden Shoe?
JB- Too Fing funny!
ReplyDeletehaha good stuff JB!
ReplyDelete"Age is an attitude"
ReplyDelete"Planking" is an attitude as well!
have gone down like this a couple of times during races, check out the guy who was tossed into fence:
ReplyDeletehttp://sports.yahoo.com/blogs/post/Video-French-TV-car-hits-a-cyclist-during-Tour-?urn=top-wp166
It slices, it dices, it makes mounds of julienne from your portfolio. But wait there's more, gold's green!
ReplyDeletemore good insight: when you are interviewing with younger folks you don't want them comparing you to their grandparents.....STFU
ReplyDeleteProper strategy - Patience while accumulating, impatience while distributing.
ReplyDelete"comparing you to their grandparents"
ReplyDeleteTake out your false teeth, mama!
unreal the number of folks on this call that had worked for a single co (ibm, pfizer, att, sap, etc) for 25-30 years and are now unemployed at 50+ and are in bad shape financially.
ReplyDeleteA consistent income for 25-30 years and they're in bad financial shape?
ReplyDeleteThe attitude-suppression training isn't working.
CADC - LOL, when do they throw the sell switch on this one and blame it on Chinese inflation?
ReplyDeleteSVM - So incredibly predictable, buyers showed up for the gap... Unbelievable something so obvious is that possible.
CP - hard to believe but it is true, guess many folks spent too much time trying to keep up with the Jones'
ReplyDeleteold people are tired, unmotivated and have bad posture....partial employer fears list.
ReplyDeleteFCX - Looks at that chart and tell me ya wanna bet it breaks over $56 this year! I say it trades at $47 first, place your stink bids before leaving on vacation.
ReplyDelete"old people are tired, unmotivated and have bad posture....partial employer fears list. "
ReplyDeleteTheir wheelchairs are a toe hazard and they have a musty moth-ball odor about them.
the call leader is really trying hard but it is nothing more than learning how to put lipstick on a pig. NO firm, given the choice, would higher a 50+ over a 30+, just isn't worth the risk
ReplyDeleteEmployers don't want the added expense and liability of personnel training for and periodic maintenance of cardiac resuscitation devices.
ReplyDeleteCP - winner, winner, chicken dinner!
ReplyDeletemore good insight: eliminate dates from your resume (esp education), whiten your teeth and figure out how to look more youthful.
ReplyDeletePretty sure God hates me, not that I don't deserve it!!
What's with the American preoccupation with youthfulness?
ReplyDeleteYouthfulness - I think it's more of a corporate preoccupation. And I agree with JB; claiming your whale ship was attacked and sunk by a mad whale probably should be excluded from the revised resume.
ReplyDeleteJB fuck that corporate world bullshit. White teeth? Open a bike shop/sierra nevada pub be happy. PS I get a % for my great ideas.
ReplyDeleteTake a couple hundred $k and bankroll a giant meth lab.
ReplyDeleteOr buy PM's...
This coffe deal is absurd, Look at FARM and JVA. JVA is a 1 bagger in two weeks.
ReplyDeleteJust went short DE at $83.7 and $83.6...it's now below it's 200 DMA and is acting really weak.
ReplyDeleteI'm finding it increasingly difficult to believe this market is traded to any extent by human beings.
ReplyDeleteWatching prices fluctuate by 5% daily and 20% weekly feels more like a video game than anything.
In the background they're playing the classic soundtrack from Disney's Fantasia movie.
ReplyDeleteWas thinking the same thing CP.
ReplyDeleteRBY back to the recent low.
RBY - Who thinks RBY will find support at the 52wk low?
ReplyDeleteCLR- Take a look a what 'no buyers' look like in a chart.
ReplyDeleteBEXP - Bought today at $29.55. The algo says the tchnicals are good. Also got some SLV and PXD but those two are not looking so hot now.
ReplyDeleteRBY - My algo is Bear 10 and says sell short in all 3 time frames with targets of 3.23 - 3.18.
ReplyDeleteGEOI - Just got a fill on that one too so I am pretty heavy into domestic oil and getting light on cash.
ReplyDeleteTakes guts to step in here Illini. Go get um.
ReplyDeleteThis market is only for the brave and insane.
ReplyDeleteThis market is unstable at best. Look at these swings on a weekly basis. My thinking is we might have seen the top for a while now but I'm willing to wait a little while longer to confirm this. I'm just going on memory here but from what I can remember it's usually the choppiest at medium term tops and bottoms. We've been moving in 80 to 100 pt swings in the S&P for the better part of 6 months now. Crazy.
ReplyDeleteSWC?
ReplyDelete1,320 will be defended today until CDS spreads on Italy blow out. That's the level my boyfriend Jeffrey Saut is calling out.
ReplyDeleteTOF- It's nice your wife is so open mined.
ReplyDeleteT3D's MDW really strong.
ReplyDeleteRBY - $3.18 is the 52wk low, maybe your algo has that one nailed.
ReplyDeleteSWC - "Stillwater Mining buying Peregrine in $487.1M deal"
Maybe SWC's palladium mine has worn thin? Peregrine: isn't that a breed of falcon?
ha Mark.
ReplyDeleteBy the way, the 1999 parallel continues to play out...it's actually quite uncanny. Should see another big down day tomorrow if it holds.
CP- The GMO news is no news?
ReplyDeleteRBY - Unfortunately I wasn't using the algo when I bought RBY at 3.76. Still holding that rascal.
ReplyDeleteSVM - Well, that was an obligatory 50SMA retest, and closing of a couple gaps up from last week but there remains a gap from $9.06 that needs to fill...
ReplyDeleteWow...C broke 4 bucks.
ReplyDeleteGMO - Oh yeah. We're talking government indecision here, so need I slap you?
ReplyDeleteOkay well, today's news there isn't particularly inspiring, actually. I'm anticipating further weakness, it traded down to $3 this time last year and nothing positive's happened since aside from potentially getting one year closer to a decision on permits...
Be that decision positive or negative, I expect environmental impact statements have taken a bruising as a general rule of thumb, over the period.
Add to that there's most likely some political card game going on in the background (when isn't there, when it comes to government?) and I'd be surprised by any outcome within my lifetime (ie: go ahead and take that world sea cruise in search of Moby Dick and check back much, much later).
Why do I keep this one in my portfolio?
CLNE- CHK going to make it's own market for LNG.
ReplyDeleteRE: GMO > Well, duh CP...you're long because it has a huge 10 month long Bull Flag on the monthly chart, of course.
ReplyDeleteAnd the last time it had one this long it went on for another 4 months then it exploded from $2.5 to $12.
ReplyDeleteYa' know, maybe it makes sense to buy land instead. Then again, no doubt government will try to steal that from you as well...
ReplyDeletenow this is very interesting:
ReplyDelete4:54 PM Want proof that individual investors have grown disenchanted with stocks? Google it. Terms such as “investing,” “stock investing” and even "bonds" have fallen sharply in the last seven years, according to a researcher, and even the two-year rally has barely moved any interest. The most popular investment-related terms: "saving," followed by "bankruptcy." Comment!
TOF - GMO - "the last time it had one this long it went on for another 4 months then it exploded"
ReplyDeleteUmm, and the economy was booming at the time if I recall. So yeah, everybody's bullish on GMO, yet it just keeps sinking lower and lower, LOL!
I wanna be a bazillionaire so frickin' bad... ;)
"The most popular investment-related terms: "saving," followed by "bankruptcy." Comment!"
ReplyDeleteEverybody's on the wrong side of the boat? Maybe PM's aren't the brightest idea after all!
Schwab's Liz Ann Sonders:
ReplyDeletehttp://www.schwab.com/public/schwab/research_strategies/market_insight/todays_market/sonders/sonders_070511.html
Its funny, but I keep reading all of these negative media articles about the markets and our economy and then I read all of these bullish articles by investment managers saying that everyone is bearish...
Most PMs and analysts from what I'm reading are expecting this to be a healthy pullback that should be bought....which makes me think we go to the 1,300 area...base, and then go to about 1,320 to trap the buy the dip crowd...at which point we drop down below 1,250.
ReplyDeleteJust babbling here, is there valid reason to believe recent PM trading and market action in general perhaps, project an uncertain impression of someone out there growing desperate to liquidate or cover? The magnitude of this year's rapid ups and downs just seem so crazy... like something's about ready to blow up or something... Maybe it's just me and I'm getting tired of it all??? I'm not sure it's even possible, but since I don't consider myself very quick on the draw or very accurate on timing, I consign myself to suffering short term slings and arrows at the expense of trying to plan ahead.
ReplyDeleteAnyway, I found this interview on another site we occasionally reference:
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/7/11_Andrew_Maguire_files/Andrew%20Maguire%207%3A11%3A2011.mp3
Great article in the Globe and Mail which highlight the difference between the economy and the market in Toronto and the US. Similar will apply to U.S., but I think is really important in understanding why the stock market can do well even if the economy is not great.
ReplyDeleteDespite poor growth, corporate profits soar:
http://www.theglobeandmail.com/report-on-business/economy/despite-poor-growth-corporate-profits-soar/article2092732/