Tuesday, July 12, 2011
07/12/11 Head Fakes
and although my eyes were open
they might have just as well've been closed
Just when you think you have the market pegged, it lurches off in another direction.
No trader can deny knowing what it's like to watch positions move against them:
And so it was that later
as the market told its tale
that her face, at first just ghostly,
turned a whiter shade of pale
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I keep running across quite a few charts that just don't inspire me all that much, they're all over the map...
ReplyDeleteGreat article from an insurance guy over at Seeking Alpha. Talks about how the insurance companies are undervalued and it is "An Undemanding Investment Thesis".
ReplyDeleteHate to get too cocky, but they really do feel like money in the bank at this point - sure hope I am not missing something here.
He talks about Hartford (HIG) which is a lot easier to buy than the ones I talk about and how you can get extra leverage with the TARP warrants.
http://seekingalpha.com/article/278756-hartford-financial-tarp-warrants-offer-advantages
Look, man. I think we rally.
ReplyDeleteI still see a rally from lower levels and later in the year.
ReplyDeleteOK, but I think we rally now.
ReplyDeleteMore importantly: who will win the All Star Game tonight? A Red Sox - Phillies World Series seems inevitable to me...maybe they should just play a one game match to determine home field.
ReplyDeleteBB- Alcoa's earnings were solid. No disappointment here. I'm happy to own the stock right now. Investors need to transition from the short-sighted trading that worked well for awhile to allowing blue chip value stocks to play out. A process measured in months/years, not days/weeks.
ReplyDeleteTOF- You actually watch the all-star game?
ReplyDeleteIrish downgrade today as well, huh?
ReplyDeleteCP- Just their coffee.
ReplyDeleteDid you guys see JVA today? Guess that trades off for now.
ReplyDeleteIt's going to be fun to watch MITK trade on thur. I'm guessing it will fall into the same old 100 share pattern as everything else.
ReplyDeleteTRX- Looks like some pain tomorrow. 4.2M share dilution @ 5.90 and another 4.2M warrants. If all are exercised that puts the float OVER 100M shares.
ReplyDeleteTRX - That's nothing, C has more debt and the float is 2.92B...
ReplyDeleteYep im a baseball junkie...we had a scout for the then expos at my high school that said i couldve gotten a full ride for pitching but i went with swimming instead. Im a big fan of baseball though...great sport...its like one giant chess match. Im hoping we have a boy and he's a lefty
ReplyDeleteTRX- So, to get 25M in financing, TRX had to chip in 4.2M shares @ 5.90 and a warrant to boot exercisable @ 7.00? That's basically shares at what?...4 bucks?
ReplyDeleteTOF...me too. But can't deal with the all-star game. Used to have season tickets to the Giants until they moved to Pac-Bell. Sat next to Rodger Craig's wife. There was one great stretch where I went to 21 games in 22 days...My liver never recovered.
ReplyDeleteI have no feeling for this market. If i had to bet it is going to stay right here and not move a tick.Earnings will be good only because they have lowered expectations. Many will beat, but when will that get stale with no organic growth. Unemployment is a worry and surprisingly countries where no one works cannot pay their debt. Yes looks quite dire. Changed my mind I am very bullish.
ReplyDeleteBB,
ReplyDeleteInsurance companies, Don't many of them have dark boxes full of funny paper like the banks? Or are they just beaten down because of all the tornadoes.
Mark that's awesome man. Pac bell is a great park. Only reason I like the all star game is because I enjoy watching players' windups and batting swings and ur watching the best of the best in this game. I bet caught up watching watching pitchers deliveries to see which guys use too muuch arm or have funky release points to guess which guy will have an arm injury and stuff like that. I also like watching stupid stuff like where in the box batters stand, where fielders position themselves against certain players...thhe game is more of a science to me...
ReplyDeleteI think we should be prepared for more stimulus, they seem to be floating the idea in the media to gauge the response.
ReplyDeleteOkay, so I don't understand all the aspects, we just had an oil price emergency and now stimulus?
Maybe it will be in the form of public infrastructure projects this time around, wouldn't that be refreshing? Sheesh, where's my infrastructure projects contractors list?
RB - Sorry about not banging my fist on the table, my ideas don't usually receive comment so I rarely mention them in much detail anymore.
ReplyDeleteI guess instinctively we aren't anticipating many new discoveries.
I suggest we ban all conversations/analysis regarding TRX, what a f*cking piece of cr*p/scam that worthless co is.
ReplyDeletejb- Alright. I guess that makes your comment the last word on that company.
ReplyDeleteTRX- OK, last comment. Shows what I know, it's up.
ReplyDeletethank you guys, it is important for me to feel all powerful all knowing now and then
ReplyDeleteAdded to my SPY short at $132.2 and picked up some more BGZ at $34.15.
ReplyDeletethe more closely I look at TRX, and yes sadly I am a shareholder, the more I am convinced it really is a scam, and I am so pissed that I invested without doing much more DD
ReplyDeletemy es buy triggered at 1316.50 and I'm now 1/2 off 1318.50, stop up to BE, target 1/4 off at 20 and runner target 22, but I expect that 22 is like a brick wall
ReplyDeleteCP- At this rate, you just might get your shot @ BAC for 3 bucks.
ReplyDeletewatching the 6E and the XG and if they weaken I'll move my ES stop up to 17.25
ReplyDeleteoh well, stopped out. my 6e confirm was late
ReplyDeleteTRX - Does this one trade with gold, or cable TV?
ReplyDeletehttp://www.sectorspdr.com/correlation/
http://www.finviz.com/quote.ashx?t=disca&ty=c&ta=1&p=d
TRX - trades with Seeking Alpha articles
ReplyDeletehuge pop in the ES, big ben must have started flapping his gums
ReplyDeleteBernanke is kicking your ass TOF. Are you going to take that!?
ReplyDeleteAdded SPY Short at $132.6...now 80% short and will add final short at SPY $133.
ReplyDeleteNo, Mark, I don't think he's ultimately gonna kick my ass. He doesn't have the political backing for QE3...not until we see lower prices and panic.
BAC - Yeah, I suppose if it went to $3 I'd have to buy some as punishment for bashing it to $3.
ReplyDeleteI'll be placing my stink order this week, I guess, to make sure not to miss the event.
That said and considering my luck, it'd go on to $1.XX and eternally flop around like a fish out of water, but since $3 was the low, and we all know prices are obliged to revisit previous levels (ie: RBY yesterday for instance), $3 should be a reasonable entry point for a novice trader such as myself attempting to net a few grand here and there on random occasion.
TOF- Atta boy! Go get um!
ReplyDeleteWhy is this stupid BSKYB thing so important...STFU.
ReplyDeletetof- The streets are littered with traders who tried to fight the Fed.
ReplyDelete2nd > I'm trading what I see as a downtrend in the markets and the economy. Being down 0.7% isn't exactly an ass kicking.
ReplyDeleteAnd didn't we previously dispell the whole Fight the Fed myth?
Just calling it as I see it. From the floor of my cell. Doing a few pushups.
ReplyDeleteha.
ReplyDeleteGetting ready to add final piece of my short SPY at $133.
2nd > When markets are this volatile after a huge run do you think it's normally a sign of a top or a bottom?
ReplyDeleteSVM - There's an open gap down from $11.45 to $11.38 which needs to fill, just above the 200SMA.
ReplyDeleteNatural target me thinks, from a trading perspective, for shares bought below the vacant gap up from $9.22
Personally, I think it's just a sign of the times. Traders have plenty to be nervous about right now. No opinion as to whether it indicates anything more than that.
ReplyDeleteAdded final short on SPY...Short at $132.9. Now 100% short.
ReplyDeleteDoes anyone actually know how it usually goes when an OTC listing moves to the Nasdaq?
ReplyDeleteMDW- What a beauty!
ReplyDeleteCLNE/WPRT continue.
ReplyDeleteMark > Uplisting changes nothing Mark. You still hold the same stock and everything...symbol just changes.
ReplyDeleteTOF- Thanks, I get that. Just wondering if it historically helps or hurts a stock.
ReplyDelete"In six of the last 10 trading days, all 24 S&P industry groups finished in the same direction (up or down). Bespoke notes that this has occurred only three times in the past 10 years, and each preceded big moves (up or down) in the market"
ReplyDeleteSVM - Okay, off @ $11.18 a 23.4% gain, will try buying back in a bit lower if/when this morning's gap up fills.
ReplyDeleteI hate selling on good days, and it looks like I sold too soon. ;)
The $133 area seems to be a cap for this move. I will set my short stops at $134 on SPY. My take on this talk of QEIII comes from the fact that the debt ceiling raise will come with fiscal cuts which will make people pessimistic about further stimulus. So the Fed is trying to support things with another round of monetary stimulus. Ultimately, I don't think this will solve debt issues around the world. Doesn't mean in the short term it can't spike the market.
ReplyDeleteMark > I think it all depends on how the stock trades going into it. MITK seems a bit extended but that doesn't mean it can't get more extended. Hell it could go to $12 before the market decides it wants to pull the stock back.
ReplyDeleteCP sell into strength. Great job!
ReplyDeleteHoney badger like play TOF! I'm cheering for you.
ReplyDeleteHoney badger thinks the market sells off within a week or two. Honey badger don't care. Honey badger don't give a sh*t.
ReplyDeleteSVM - Not only are there gaps up, but the RSI(7) peaked over 70 and came back down through.
ReplyDeleteI need to check the silver chart and see if the same thing's true there, but I'm feeling good about taking that gain off the table instead of sitting here watching a nice sum of money (nearly 6 months of income) disappear. I'll do the right thing with it and cycle that money into the economy. ;)
RB - Thx for the support.
Meanwhile, wake me up once the slow motion train wreck, pony show and pooch screw occurring in WDC is over, I'll volunteer to pick the dead, burned and mutilated bodies from the ashes.
ReplyDeleteSomebody's gotta do the heavy lifting, I suppose.
Bernanke - "policymakers are actively considering further stimulus for the economy if it is needed."
ReplyDeleteHard drives are dead. it's all about the cloud!
ReplyDeleteMy boyfriend Jeffrey Saut was just on TV Mark...he's skeptical of the European bears and bullish on stocks.
ReplyDeleteI can't believe I'm betraying my boyfriend.
At the risk of jynxing myself, I'm "only" down 1% today/yesterday despite being long BGZ and short SPY.
CP LNKD hit $110. I am using this as a lesson to myself. I think on these momo stocks it is ok to take really small positions as a flyer. Kind of like playing the hard ways on the crap table.
ReplyDeleteLNKD only up 8%...what gives?
ReplyDeleteI actually like this company a lot, notwithstanding it's silly valuation. The mentality on the valuation is basically well if Groupon is worth $16 Billion then why wouldn't LNKD be worth $10 Billion.
Two quotes from Bernanke today:
ReplyDelete"Is Gold Money? No"
"Has monetary policy caused the dollar to fall? No"
Craziness.
Biggest surprise returning here is TLT.
ReplyDeleteCP- Nice work amigo. I only took 10% out of that sucker.
TOF- I saw that exchange. I think Ben was just Fing with RP. Seriously.
ReplyDeleteMark > I hope so man...I'd have to suspect that at some point here a lower dollar will really piss off the Chinese etc.
ReplyDeleteTOF- low dollar. Has to no? Raining inflation down on their heads.
ReplyDeletehttp://blogs.marketwatch.com/fundmastery/2011/07/12/the-u-s-treasury-will-not-default/
ReplyDelete'Update: On CNBC last week, Warren Buffett had a very good comment:
I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.'
Long short crude oil SCO. Love saying nonsense like that.
ReplyDeleteI actually hurt my knee walking to the bath room last night. God I'm a friggin wreck.
ReplyDeleteRB- Seriously?
ReplyDeleteRB- TZOO is forming a sweet C&H here.
ReplyDeleteMark > just wear knee pads around your house. Kendra probably already does it no?
ReplyDeleteGMO - Dead money? That 10 month bull flag formation is beginning to look a little long in the tooth.
ReplyDeleteKnee pads for soccer?
ReplyDeletePAL- Is that what's called a trend day?
ReplyDeleteGMO- I guess it's just a question of how long people will wait...and wait...and wait??
ReplyDeleteoh jeez nevermind...thought u hurt them walking into something in the bathroom.
ReplyDeletegot too happy watching the market reverse and turn my losses around.
TZOO On the watch. A bernanke rally over $80 and i am long. I am leaning towards the team camp for a breakdown. Market seems weak. Like your knees. I have floating shit in my knee and they will just lock up. One time i was just walking down the hall and Bam fell face first (really nose first, I'm Italian) on my concrete floors.Speaking of Bam where is FF. i guess he got disgusted with the buy the dip position trading that pervades the board. I'm like come on FF no one parties like us gee wiz. T3d I'm calling you out next better post something.
ReplyDeleteSPX - Looks like the market is slowly being strangled since mid-day.
ReplyDeleteRB- Same here with the knees. Fing thing popped out last night and I went down like 10 cent hooker.
ReplyDeleteKnee pads is what JB is going to need in his new corporate job along with his bleached teeth.
ReplyDeleteHmmm...XCO?
ReplyDeleteFF - Hasn't he been posting a lot on CC lately? Nothing much about trading, just a lot of very good insights and observations about how we are all FUBAR and how we got there.
ReplyDeleteMark, I have avoided an operation because friends of mine that have gotten it done limp worse after the operation. Funny they always claim they feel good as new. I think our own minds have a spin doctor to convince ourselves of bullshit. Speaking of knee's MAKO is the go to stock. I see alot of growth or a buy out for this company. Five stars.
ReplyDeleteIf TLT keeps going up, Ben can do what ever he wants.
ReplyDeleteHa you crack me up RB.
ReplyDeleteMy knee is messed up too but I have tendonitis triggered by a drunken bike accident.
RB - Would that be the long or the short of it? ;)
ReplyDeleteSVM looks a little weak to me and silver can't seem to hang onto $38, if you think crude is about to take a dive as well, maybe I'll show some discipline reentering SVM.
TLT - Considering the DC BS volume is growing louder than ever, was anyone seriously anticipating this market would hang onto any gains (insert photo of flying monkeys)?
Perhaps today's close will reveal a few clues for PM's?
Like MAKO also. I've had 5 Knee operations. No choice.
ReplyDeleteTwo major head fakes this week...yesterday's close and the majority of today's trading range. Essentially, we're sideways this week which to me is bearish given the big drop from last week. One would have expected a sustained rally.
ReplyDeleteMaybe we get one into the close.
I see where you can get Honey Badger T-shirts on the internet... These should be mandatory attire for serious and especially aspiring traders.
ReplyDeleteMAKO - Was mentioned in a DOW Jones News item today as a possible takeover target, among others in the field:
ReplyDelete" The Kinetic deal is the latest sign of interest from private equity firms in medical technology companies and marks one of the largest leveraged buyouts overall since the financial crisis. Last week, blood-test product company Immucor Inc. (BLUD) agreed to be acquired by TPG Capital for about $1.97 billion.
Indeed, Kinetic has been through the process before. It was taken private in 1997 by Richard C. Blum & Associates LP, a private investment concern, and Fremont Partners LP, a private equity fund, for about $885 million. It went public again in 2004.
Susquehanna Financial Group analyst David Turkaly believes the sector is "ripe for further consolidation." Potential future acquisition targets include Align Technology Inc. (ALGN), Hologic Inc. (HOLX), MAKO Surgical Corp. (MAKO) and ArthroCare Corp. (ARTC), he said."
MAKO - So how does this relate to those over 50 being forced into premature retirement? Would they need these pre or post pasturizing?
ReplyDeleteCSCO - Has turned red as a result of the slow strangulation today.
ReplyDeleteMAKO - The "Graying of America" has a lot to do with the interest in these medical stocks.
ReplyDeletepasturization: Wikipedia - Verb: The act of being placed in, or put out to pasture.
ReplyDeleteSigning in to congratulate tof. On his market call, not the drunken bike ride.
ReplyDeleteMAKO- My mom is looking into a total knee replacement for some totally unknown reason. I think they're bored.
ReplyDelete5 operation? On the same knee? That sucks.Too late for MAKO. Maybe you should look for some mobility products instead. Too bad the scooter store is private.
ReplyDeletehttp://www.thescooterstore.com/
2nd > I'm not taking the bait. We could be up 200 tomorrow, yielding today as just another head fake.
ReplyDeleteToday is going to have an ominous Nuclear Triple Death Star Doji on the dailies. I don't think Big Ben is going to be able to fight that.
ReplyDeleteYes, tendinitis treatment for retirees combined with proposed SS budget = Small box of bargain wine with can of aerosol cheese?
ReplyDeleteRB > I read some article by a trader saying that about a death star or shooting star....funny stuff. Why don't we just call it a Lord Helmet and be done with it?
ReplyDeleteYUMmmy!!!
ReplyDeleteWinner winner KFC dinner!!!
RIMM - Any hope there?
ReplyDeleteBelieve we're ready to roll over...
ReplyDeletehttp://www.screencast.com/t/wy2bpAG5gNn
Mark -- About a year ago we were discussing the possible HnS in SPX. Obviously QE2 resolved that to the upside. The STO(11-5-3) broke the EMA20 in Aug2010 to the upside and we were off to the races. Now let's see how the POTENTIAL decline goes. Your question from a year ago is still very appropriate...'How will you know when you're wrong'...Cheers
ReplyDeleteFrom a really old Q & A with Bill Fleckenstein, whic pretty much sums up one of the reasons why I think this market is set to fall...i.e., that there is way too much speculation going on in the market (see any one of the high fliers trading at ridiculous valuations) at a time when risk should be mimized:
ReplyDeleteWhere do the mutual funds fit into this whole schema?
The mutual funds have been the vehicle through which the American public has put money into the stock market. They are the vehicle of choice, and part of that's because you've got daily reporting. People can now look up and see how they're doing on the hour at the end of the day and how their funds are performing. But this has been the way that the public has gotten into the stock market. Unfortunately, because of the daily reporting and the way the system works, I think it's fomented speculative techniques in the way money is invested. This notion of momentum investing that is the sort of the vanguard of the mutual funds, to me, is an oxymoron. Momentum investing is not investing, as I find investing to be trying to buy a dollar for 60 cents. It's the belief that you can buy a stock for three dollars and sell it for four dollars.
What's particularly interesting, one might say dangerous, about the present mutual fund boom is that techniques that the portfolio managers use. Peter Lynch is held in great esteem. He was a terrific -- is a terrific investor. Unfortunately, the techniques now being used by all the top funds don't have a lot to do with what Peter Lynch used to do in terms of trying to really dig through and get all the research and be a fundamental investor. What is going on today, what is called "investing" is really speculating. The notion that "I can guess which way the crowd is gonna run next and I'll get there before them." The techniques are more about trading, rapid turnover, paying any price for a stock as long as it goes up or behaves a certain way. It is about crowd behavior and stock price behavior, not about analyzing the underlying businesses. It is 180 degrees away from what Peter Lynch did or what Warren Buffet does. The people that are held up as the genuine heroes in the investment business for the last 30-40 years are investors. What goes on today is not investing; it's speculation.
I suspect we will get one last throwback rally before we move down to 1,220. I'm loaded with SPY short avg price $132.4. A throwback rally might bring us to $134, which would make someone in my shoes squirm, make all shorts officially fed up with this "bullshit" and give the bulls confidence the dip buying will continue. Then we get the flush.
ReplyDeleteIf we get down to 1,295ish in the next day or two I will probably sell 1/2 of my shorts because we will get one big throwback rally, most likely on the back of the debt ceiling raise, which should let me enter my shorts again around 1,340. That's my thinking.
ReplyDeleteKyle- Yeah, I remember that too. Feels different here too me. I'm leaning with you and TOF here...and have the cash to prove it!
ReplyDeleteDon't look now but the good ole Ted Spread is trending upward:
ReplyDeletehttp://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND
new post
ReplyDeleteI think we go higher from here. I'm not a chart reader or a short term trader, but I think good earnings drive us up the rest of the year.
ReplyDelete