Monday, August 22, 2011
08/22/11 Fatigued Bulls
Asleep in the daytime, asleep at night
Life is all playtime; working ain't right
I have my Sunday, that ain't no lie
But oh Monday morning ain't my favorite cry
'What's the point?' That's what I'm hearing in the Longhorn locker room. That's the paradox of the markets- until they stop buying (the dips), we can't go up.
Therein lies another advantage to buy-and-hold- I'm able to wait out the waiting game.
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Towed away, towed away! Where do you go when you're towed away?!?!?
ReplyDeleteIn SF you would take a cab to Bryant and 8th, shell out $500, and recover your vehicle.
ReplyDeleteJesse, which leading "momentum stocks" are you following, just to get a preview of what might happen to the broad market in the next few days?
ReplyDeleteDavid - you only need to follow one: TZOO...
ReplyDeletejust kidding, take a look at TZOO, OPEN, DECK, LULU, CROX, CMG...
Cab sign: We're here, to get you there!
ReplyDeleteDavid - I suspect we break support of 1,120 tomorrow unfortunately (b/c I bought today)...but my thinking is that will be a fakeout. I could be totally off on that but it's just a guess given the recent history of the market to fake out as many people as possible.
ReplyDeleteDavid-
ReplyDeleteMy watchlist contains: aks zeus pcx fdx mgm byd jva uri winn tex epl nflx tzoo
In terms of momos to watch:
IDCC NFLX GMCR GTLS TZOO SFLY LULU MITK (not liking rolling top pattern)
"PMI banned from writing new policies at bizjournals.com -32.17%"
ReplyDeleteTA - Huge gap up is now completely gone, towed away...
ReplyDeletejust watched the cramer interview with the CEO of TZOO...interesting comment he made: why don't they just go public since Groupon is worth billions and they're only worth 500 Million. i suspect Groupon won't be worth that much come time to IPO. but it does beg the question regarding why the company is only valued at 22-23 times CY EPS and PY FCF. their business model seems to be highly scalable.
ReplyDeletethey have had a huge subscriber base (about 24 million subscribers now) and are able to leverage that base to advertise local high end deals (i.e., 1/2 off deals to Ritz Carlton vs. Groupons half off $10 subs at local deli) to their customers at a lower cost than competitors like Groupon, Google etc because they already have those subs in place. i would think Google would be interested in them given their $6 Billion takeover bid of Groupon, which is ramping up advertising expenses (and losses) trying to get new customers, but i guess in this market people are less willing to take any risk.
either way, TZOO has a pretty nice scalable business model and their valuation is cheap.
sorry...he said why don't they go **private**
ReplyDeleteSo unfortunately, I broke my rule yet again and went 100% long today...split up 40/30/30 with TZOO/BTU/DECK
ReplyDeletehere's to a face rippin rally! or at least no breakdown...
"David - I suspect we break support of 1,120 tomorrow unfortunately (b/c I bought today)...but my thinking is that will be a fakeout. I could be totally off on that but it's just a guess given the recent history of the market to fake out as many people as possible."
ReplyDeleteTOF -- the 10-minute S&P futures chart is giving me a distinct bearish feeling (lower highs and lower lows since Friday's rally). I think there is a good chance we break 1100 tomorrow, even if only temporarily.
Jesse, how does your "watch list" differ from your "momo watch list"?
ReplyDeleteForex Fraud allegations; Big Banks backdating currency transactions, skim differential.
ReplyDeletehttp://online.wsj.com/article/SB10001424053111903918104576502293798149096.html
Better link:
ReplyDeletehttp://finance.yahoo.com/blogs/daily-ticker/madoff-whistleblower-big-banks-ripping-off-pension-funds-152836936.html
"TOF -- the 10-minute S&P futures chart is giving me a distinct bearish feeling (lower highs and lower lows since Friday's rally). I think there is a good chance we break 1100 tomorrow, even if only temporarily. "
ReplyDeleteDavid - Yep I absolutely agree....my thinking is my stop out point is 1,070 ES (sufficiently below old lows to avoid getting fake stopped out) which is 50 pts downside risk and my upside target is 85 to 140 pts higher (assuming the highs from last week to the prior support levels from earlier this year), so the risk-reward is favorable to the long side for me right now...
David - I also figured that today's reversal was possibly a headfake as well and that it was a double bottom in the markets or a W pattern, which the market has been forming quite a bit in the past year (last summer, again in November, in the period between March and June 2011, and again 2 weeks ago as it was finding its footing)...and I figured there was a chance for that to happen again here and if it does, then the market could easily gap up tomorrow.
ReplyDeletewho knows? i figured that the risk was greater to the upside here than downside and there are a lot of stocks that "look" cheap for a short term/intermediate term bounce.
Not much movement in CDS spreads today...a bit of downside but still elevated:
ReplyDeletehttp://www.cnbc.com/id/38451750
same with TED spread
http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND
FRO - $6.66 52wk low.
ReplyDeleteFRO...You go first BRO :)
ReplyDeleteCareful with TZOO. SODA was on Cramer a few days ago also.
ReplyDeleteMark - I'll be careful with anything long now...the market is not on firm footing so I'm relying on a rally to get my positions going...
ReplyDeleteTOF- Yep, a nervous long here also. I do like DECK though. Energy plays have me confused right now. Lots of cross currents it seems.
ReplyDeleteAll the news coming out about MS is interesting.
Hard to believe, but more money in the Gold ETF than the S&P 500 ETF.
ReplyDeleteThe gold ETF, GLD, has finally overtaken the S&P 500 ETF (SPY) as the largest exchange traded fund. The market of SPY is now $74.7 billion versus GLD's market cap $78.5 billion.
To me, it indicates that fear has overtaken optimism and that there is a lot of upside in stocks if governments can calm things down.
David, congrats on your faith in Gold. I still feel like it is Nasdaq 1999 and most of the people in gold now won't sell and will lose out on all those paper gains that they say they don't care about.
TOF: I am afraid that all those who bought the rallies on Friday and today are still in the market, as they most likely set stops below 1100. So I would be really surprised if the market gaps up tomorrow and rises above today's high -- there are too few buyers for that to happen. The market first needs to drop below 1100 first to shake them out, and then start going up and force them to chase the rally -- only blind chasing will propel S&P above today's high...
ReplyDeleteMan, talk about a tough play with a lot of moving parts. XCO...Throw in recent insider buying. This, of course, is a 'take private' play. I'm interested.
ReplyDeleteNice gig if you can get it. S&P president to step down. He must be very popular at parties.
ReplyDeleteDoes anyone here use stops?
ReplyDeleteDavid can protect his gains by setting stops outside of normal noise and above his buy point.
If gold gives back some in a trend knockout and then resumes it's upward trend it's a buy.
Today we had an opening gap reversal and it was sold all day with one retrace, ending "on it's butt" as Landry said. Not exactly the picture of strength, although it is pretty oversold.
My guess is shorts will use a retrace/short squeeze to get shorter once any rally runs out of gas, and I think it will.
It all hinges on Ben's big pep rally on Friday.
But that may drive gold insanely parabolic.
Interesting times.
David there u go again telling the market how she should act...she's a moody bitch right now and she will do whatever she pleases
ReplyDeleteTOF, I am just sharing with everyone my gut feeling after looking at the futures chart. I will set stops, however, based on the charts themselves. If S&P rises above today's high, then I am closing my SPY puts.
ReplyDeleteTBT - Starting to look good?
ReplyDeleteALU - The H&S appears to have completed it's downside target, some gaps down need filling here...
ReplyDeleteThe futures are putting on quite a show tonight -- at this rate, when I wake up, they'll be at 1200. :)
ReplyDeletefroth already coming off the futures, will fade gap (assuming there is one), unless the 6E somehow gets above 45
ReplyDeletegood luck today traders!
Interesting move in Gold in the futures last night. Up around $10 after the market close, now down $6.
ReplyDeleteMaybe the start of a correction or maybe nothing, but we do have to get a correction sometime.
My GLD $165 Oct puts aren't looking too healthy right now, but I still think there's a good chance they make money.
Looks like ES 1,145-1,147 is a ceiling for now...1,152/53 is the next resistance area.
ReplyDeleteStopped out of tzoo:( Back to bed:(
ReplyDeletebac on its way to $5 and below. still think it will get split apart well before it can bring down the entire financial system
ReplyDeleteMarket's doing a stand-up job creating despair.
ReplyDelete2nd - the market is reflecting the despair, not creating it.
ReplyDeleteMarket and despair - A self-fulling prophecy?
ReplyDeleteand that is why I continue to add, albeit at a slower pace, to my long port. in the short run the markets will continue to be rough, but I'm looking at the intermediate term and beyond. the global growth story is still real and once we finally cut off the dead wood (bac, some euro banks, etc) the equity markets will move higher.
ReplyDeletefantastic oppty for investors, horrible future for many developed country job seekers.
fulfilling
ReplyDeleteLet's see if we can get HEK @ the 365. 5.20.
ReplyDeleteSold a little DECK and moved a little into TZOO at $32.3
ReplyDeleteJB/CP...Yep.
ReplyDeletebac cds spreads now higher than at the peak of the crisis.
ReplyDeleteBAC - Just say "NO" to banks.
ReplyDeleteGiving it to 10,000th time to get rid of LEXVF.
ReplyDeleteTLT - still coming off, it seems. New trend?
ReplyDeleteSold more DECK at $77.5 and moved to TZOO at $32.4.
ReplyDeleteDECK. Great choice TOF.
ReplyDeleteI think it's important we had reversals in the SODA/OPEN's of the world. Let's see if they stick.
ReplyDeleteBro - anything new on the home building front?
ReplyDeleteSold the rest of the DECK and moved it into TZOO at $31.8. Probably stupid to be selling a winner for a loser but my belief is TZOO is forcing the last remaining buyers out right here...
ReplyDeleteCan we please just skip to Friday afternoon?
ReplyDeleteshoot, can we skip forward to 2014?
ReplyDeleteNada bro.
ReplyDelete2014? What you want to see the S&P at 2,100 courtesy of Laszlo Birinyi?
ReplyDelete2nd's WFC is the winner today in that space today.
ReplyDeletetof - that would work...lol!
ReplyDeleteit is so crazy how well MP works, as soon as I get a bit sharper with the entries and exists (those are based on 3 different MA's, PA and candlestick patterns) I'm going to move another 10% out of cash into the futures account.
ReplyDeleteANR.
ReplyDeleteScaling back into TZOO little by little. Weekly trendline points to 30. Willing to hold if it goes there.
ReplyDeleteANR - very nice chart on the daily, might toss a stink bid in at 29.85 or so
ReplyDeleteLater ladies.
ReplyDeleteThe Buy And Hold Blog:
ReplyDeletehttp://www.crossingwallstreet.com/
Jackson Hole: Will Bernanke propose an "Operation Twist"?
ReplyDeletehttp://ftalphaville.ft.com/blog/2011/08/09/647801/lets-twist-again/
Market rallies on....dismissal of charges against Strauss-Kahn!
ReplyDeletewe break thru 48, 56 is the short term target (ES), Solomon was big seller from the get go and is now back in buying, short covering...hope so, OUCH. have a LL at 48, 6 tick stop
ReplyDeleteIt's been going down ever since they arrested him.
ReplyDeleteS&P futures just rose above yesterday's spike high and above the spike high they made during the night. At the same time, the lows that were made by the futures create a nice round shape: since last Friday: 3 lower lows and then 3 higher lows. This definitely doesn't feel like a bearish pattern anymore -- it actually feels like the 1120 support level has held. So I just closed my remaining 6 SPY puts at $7.43 which I had purchased last week at $5.15.
ReplyDeleteCongratulations, TOF, on going 100% long yesterday!
TNA:SSO = 0.987, +3.85%
ReplyDeleteDavid-
ReplyDeleteI watch the momos for general market direction.
The watchlist is the stocks I'm most interested in- momo or otherwise.
Back in on the long side. Going to try to ride a possible snapback rally from here. I'm gonna try to not watch the market for the next couple of weeks, so I may be mia for awhile.
ReplyDeleteAs I was thinking about some good ways to play this rebound, I figured I'll try shorting TLT via puts (since I don't have enough free cash to short a decent amount of TLT outright). So I just bought a starter position: 3 contracts of October $115 puts for $7.80. Another reason why I ventured into TLT puts is that gold had a big down day today, and gold is "joined at the hip" with TLT because when bonds yields go up, they provide an increased competition for gold, which doesn't earn any yield. So today's drop in gold is possibly a precursor to the drop in TLT.
ReplyDeleteWhat other ideas do you guys have to play the potential rebound to 1250?
David - Thanks but unfortunately I played TZOO, the only one on my list that is down...well, aside from BAC but that's a given right?
ReplyDeleteDavid - Buy DECK, JPM....but wait until we clear 1,150...
ReplyDeleteAlso bought a couple of SPY October $110 calls at $8.89 -- the 3 spikes we got in SPY futures between 1120 and 1150 since Friday look very much like the standard phase of very high volatility after a large directional move, and such "in place" volatility usually signals the end of the large directional move (down in our case).
ReplyDeleteTOF -- didn't you also buy BTU?
ReplyDeleteDavid - I did and I bought DECK...but TZOO is down 6% which wipes out both of them...
ReplyDelete1/4 off @49
ReplyDeleteThe 5-day intraday chart of DECK seems to have an almost 100% correlation with that of S&P. However, DECK did make a lower low this week relative to the first test of 1120 two weeks ago, while S&P actually did not break below 1100 this time AT ALL. So maybe SPY is a better play here...
ReplyDeleteI'm going to take another 1/4 off at 49.25 and move my stop up to BE, we are stalling a bit here
ReplyDelete1/4 off 50, stop up 2 ticks going to let the last car roll
ReplyDeleteSPX - Let's see if an intraday HnS might play out w/ 1152.17 top and Demark r1=1146.85 / Fib-r2=1145.21 as neckline...
ReplyDeletes.o., +2 on the runner, as long as we stay north of 43.25 on the ES we will move back to HOD by the close
ReplyDeleteDamn, big earthquake just rolled through here...
ReplyDeletecp - Yep -- I'm in Haymarket VA 5.8
ReplyDeleteQuick!! Close down all of New York. Give me an Fing break.
ReplyDeleteDamn! I knew that today's sharp rally in S&P futures will get sold just like the 3 previous such rallies. Why did I rush to close my SPY puts and go into calls???
ReplyDeleteSPX - HnS Earthquake Completion Pattern...Sweet
ReplyDeleteOK, my complaint was acknowledged and futures started moving back up. :)
ReplyDeleteAdditional UXG shares here for a trade 5.78
ReplyDeletedudes - gold + silver crashing and equities withheld selloff...put to call ratio is near all time highs and everyone is bearish....bears can't break 1,120 close...tells me we're due for a bounce.
ReplyDeleteSPX - Nope we must complete the RHS... 1149.48 at 1155 and now 1149.56 at 1435... let's see
ReplyDeletefirst time i have seen any volume on an up move in TZOO...still cautious on this one tho
ReplyDeletestill think market needs to close above 1,150
"dudes - gold + silver crashing and equities withheld selloff...put to call ratio is near all time highs and everyone is bearish....bears can't break 1,120 close...tells me we're due for a bounce."
ReplyDeleteI totally agree with you, TOF. The crash in gold must be a tell. I just bought 4 more TLT puts, this time September $113 for $5.15. Will close all my TLT puts if TLT rises above $112.
Once TLT breaks below $109 (sufficiently below its range over the past 4 days), I'll buy some at-the-money TLT puts (even more risky than the out-of-the-money puts I've been buying so far).
ReplyDeleteWe may be "due for a bounce" but the bigger question now is "What's the dominant fundamental?".
ReplyDeletehttp://peterlbrandt.com/the-dominant-fundamental-theory-explained/
BAC bulls take heart, Dick Bove is on your side...DOH! How does that dolt hang on to paid employment?
ReplyDeleteIllini - At this point I'm just playing a bounce. Longer term I think we're f'd. But let's have fun trading the bounce, no!?
ReplyDeleteTZOO looking really good now. Green close would pretty much put nail in the coffin of the selloff.
Peter Brandt says this about the dominant fundamental:
ReplyDelete"[Think about the stock market since March 2009. The dominant fundamental was corporate earnings. A secondary fundamental might have been irresponsible actions by a bunch of incompetents at the Fed. In hindsight, all other factors were just noise. I believe there is a new dominant fundamental factor driving the market now. We will know what is(sp) is at a later date.]"
It is not earnings anymore since they have been good. It may be something like a renewed banking crisis or the FED being out of ammo.
Gold Crashing, really?
ReplyDeleteGold has moved up from 1500 to 1900 almost non-stop for a 26.6% return in about seven weeks. It falls 2.74% and you guys are labeling it it a crash. Do you really believe that?
Illini, I like the way Brandt thinks.
ReplyDeleteyeah that's a bad analysis t3d..pulling back is better description. but it tells me the market is ready to bounce a bit. 1,200 will be tough to get thru if it rallies.
ReplyDeleteillini - i don't think we can officially say it's a bear market yet. we still haven't seen a 20%+ drop in SPY and we haven't gotten below the lows from last summer. I believe the odds are good it will but until then I think Peter Brandt is wrong sticking a fork in the market.
Energy is going crazy.
ReplyDeleteMP scores big again, nailed the ES action to a tee, my fault for moving my stop up too tight, still a winning trade but today could have been huge
ReplyDeletebad language, but this guy is funny and sharp:
ReplyDeletehttp://ibankcoin.com/flyblog/2011/08/23/70-in/
TOF, you short term scenario is probably right on. Many people are covering shorts going into Friday. It would not surprise me to see it over 1200.
ReplyDeleteJust nursing my sick longs (SICK) and gold.
AGRO MDW TOT ETE SDT WPRT PDLI
AREX, is on my radar.
ReplyDeleteT3d - Any opinions on WFR?
ReplyDeleteFor income orient here SDT and PDLI are in the 10% range and TOT 7%, I know BORING.
ReplyDeletet3d - is SDT a new issue?
ReplyDeleteWFR, speaking from the charts. Weekly is a sell, but worth watching going from stage 1 to a stage 2 stock need time and price for that.
ReplyDeleteDaily is a buy, price breaking over 7 dma, positive sto and MACD, increasing vol.
However, in this environment weekly should dominate my thinking.
Actually though the daily is good and three of the four technical should work good in this type of oscillating environment.
JB, SDT is a royalty trust off of SD the parent newish.
ReplyDeleteT3d - Thanks...
ReplyDeletethank you T3d
ReplyDeleteJames K has been pretty bearish of late but sounds like he's thinking Fed policy is stronger than mkt giving it credit for:
ReplyDeletehttp://seekingalpha.com/article/289293-the-fed-s-2-year-pledge-5-reasons-it-s-important
"Gold Crashing, really? Gold has moved up from 1500 to 1900 almost non-stop for a 26.6% return in about seven weeks. It falls 2.74% and you guys are labeling it it a crash. Do you really believe that?"
ReplyDeleteT3d -- today gold is having its biggest drop in one day since the crash of summer 2008. So I think the word crash is VERY appropriate, even if only for today.
BORN? I was actually watching it when it popped.
ReplyDeleteBull trap going into Friday?
ReplyDeleteDavid, gold has just had one of its best seven week run's ever. It has pulled back 3%, most investors would consider an 8% pull back as a correction.
ReplyDeleteThere is no way a 3% pull back can logically be labeled a crash. David, you are really bright and I'm surprise you wish to sound like CNBC.
BTW, gold.
ReplyDeleteDo I think its an extended long here? yes
Would I want to add here? no
Do I think gold is going a lot higher here? yes, as long as real interest rates remain negative gold will have a strong bid to it.
T3d > Technically Gold is about 5% from overnight highs...that's a sizable drop but I agree not a crash yet. If the weekly moves below 1,730 then it's a crash.
ReplyDeletei'm still pissed about TZOO. down 4% on a day like this hurts...oh well, i'm being a dip buyer there, hoping a 70% drop from highs is enough to make money on the long side...we shall see.
Yeah man, everyone has a right to their own definitions. The B/O point on the weekly is 1560.80 continuous contract.
ReplyDeleteMy basis is 296, I'm not very concerned.
Silver - Still almost $42, gold remains over $1800.
ReplyDeleteNot too shabby, IMO, considering these have been in crash mode for a decade now.
Oil, equities, etc. need to begin catching up with PM's at some point, low rates will continue to help and if not low enough just have the FED compete with the bondies seeking safety of government debt. Run the price up enough to where they can't refuse to sell and buyers feet get cold.
T3d - You're Good man. We need some Adult Guidance (at least I do). Hope your project is going well. Don't go too far...
ReplyDeleteGold, just playing with numbers.
ReplyDelete1915 h
1560 l
half way back 1737.50
Thanks Kyle, but there are 150 ways to make or lose money in the market and we are all entitled to travel our own paths.
ReplyDeleteBTW, I like David and everyone here and enjoy the exchange of ideas, please remember its never personal and I can get carried away.
T3d - Yes, ur so right. I believed the HnS would complete at 14:20'ish. Glad I held off on the TZA entry.
ReplyDeleteOK, I'll keep it in mind, T3d. :)
ReplyDeleteBy the way, in my comments about the gold crash today I made no implications about the near to mid-term path of gold (the long-term future path will most likely follow the 20-30% annual uptrend, as I have tried to justify here before many times). I have little opinion about what's going to happen to gold in the short term, and I would certainly not short something with a 20-30% annual uptrend. Today's crash, however, was important in that it most likely signaled a move away from risk aversion in the market, which should lead to a collapse in TLT. Hence my extra confidence in buying the TLT puts.
ANR, FNSR - looking at some short puts
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