Tuesday, August 23, 2011
08/23/11 The things that pass for knowledge
You wouldn't know a diamond
If you held it in your hand
The things you think are precious
I can't understand
Gap up Wednesday.
Gap down Thursday. ---- it- make that another gap up Thursday.
Buy and hold the ultimate gap up on the underwhelming news Friday.
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No, I'm not kidding.
ReplyDeleteCNBC "Fast Money" discussion on gold today new
ReplyDeleteSubmitted by Bill Cara (2714 comments) on Tue, 08/23/2011 - 17:32 #92965
I tend to like the back-and-forth discussion from most of the panelists, if I take the time to watch, but today's discussion seemed to suggest that Americans control the gold market. Think again. Americans are tiny traders in gold, and most people hold tiny positions, mostly ETFs and goldminers. Europeans are more involved, but the big money and interest in gold is coming from India, China, Russia, and other countries. When it comes to gold, Americans are usually blowing smoke.
The price was down some -3% today, yes. It is now back to what it was yesterday. So what! Why bother talk about this unless your motive is to create uncertainty, sell CNBC advertising, etc. This media spin is all laughable to the big money traders in gold.
"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."
ReplyDeleteHedging could be an option and assuming you were trading the metal, that should be easy to accomplish.
I'm trading a silver miner, and it appears this miner is priced for sub $20 silver (the H&S pattern seems to indicate a sub $2 target for this miner).
I suppose if an eurozone bank were to implode, PM's could be a good safe haven at this point, depending on how the situation was addressed(more of the same TBTF). The safe haven that didn't work well in 2008/9?
Well, here's at least part of the reason for the gold selloff. It will be interesting to see if gold bounces back tomorrow or turns into a big pullback like silver at $50 when they lifted margins there or something else:
ReplyDeleteShanghai Gold Exchange lifts margins for gold forwards
http://business.financialpost.com/2011/08/23/shanghai-gold-exchange-lifts-margins-for-gold-forwards/
Here's a good reason for a silver selloff:
ReplyDeletehttp://4.bp.blogspot.com/-TjyC4HwUcjY/TlL9Nyr4xfI/AAAAAAAAGyU/tPU-DM9TpyY/s1600/sc-1.png
And we all know prices don't go straight up:
http://1.bp.blogspot.com/-PziEvb8W7ss/TlL_SDo0_6I/AAAAAAAAGys/c9dwlAykSpk/s1600/sc.png
kinda supports Buffett's theory that home building should start to pick up by the end of the year:
ReplyDeletehttp://seekingalpha.com/article/288744-housing-will-rebound-stronger-than-expected?source=yahoo
i actually agree that home builders are worth starting a position in for a longer term trade. they have good balance sheets and valuations are somewhat undervalued.
Late, late meeting. Kinda an interesting conversation with my client. I'll fill you guys in tomorrow. I need some dinner.
ReplyDeleteTeam, Buffet is talking his large housing book and there will be no new construction turn around. Interest rates are at all time lows and housing is depressed. New construction is not only hurt by the shadow inventory but also the cost of building is actually going up due to the weak dollar. Existing Houses are priced much lower than actual building cost(not even counting lot value). Schiller and others say housing prices will drop further. The only thing that can help is to keep low mortgage rates and have robust job growth combined with wage increase. Does Buffet predict that also? I watch Buffets USG as a gauge on housing. The chart looks the opposite of gold.
ReplyDeletehttp://finviz.com/publish/082411/USGc1dl0103.png
Thinking about USG. if it gets below $6.00 I think Warren may buy it. According to finviz $5.30 cash to share.
ReplyDeletehttp://www.dailymarkets.com/stock/2011/08/23/new-home-sales-drop-again/
ReplyDeleteThe 15 lowest months on record (back to 1963) for new home sales have all been in the last 15 months. New home sales have only exceeded the 400,000 level three times since September of 2008 when the financial markets collapsed. The most recent time was in April 2010, as sales were inflated by the rush to get in under the wire and collect the homebuyer tax credit. Sales collapsed after that, and July comp is thus an easy one.
Relative to the peak of the housing bubble (7/05, 1.389 million), new home sales are down 78.5%. Prior to September 2008, there had only been 20 months in which new home sales were below the 400,000 level, with the most recent being in 1982. The graph below shows the history of new homes sales (blue, left scale) along with the growth in population (red, right scale), since presumably if you have more people, you will need more places for them to live.f you want to know why the recovery has been anemic so far, look no further than the graph above! New home sales are vital to the overall economy. If new homes are not selling, then homebuilders have no reason to build more of them. After all, that is very expensive inventory to sit on.
Unlike used home sales, each new home built creates a huge amount of economic activity. Not only are low new home sales bad for the big homebuilders like D.R. Horton (NYSE:DHI), but also for all the companies that make the products and supplies that go into making a new house. They range from Berkshire Hathaway (NYSE:FO) for plumbing fixtures and cabinets to USG (NYSE:USG) for wallboard to PPG Industries (PPG for glass and paint.
Lack of “Household Formation”
ReplyDelete"The main problem right now for housing demand is the very low rate of household formation. Instead of moving out to get their own place, people in their 20’s are being forced to live with Mom and Dad, since they don’t have a job that will pay the rent or support a mortgage. Since residential investment is such an important swing factor in creating jobs in the country (both directly and indirectly) that sets up a huge “chicken and the egg” problem.
We are not in a robust recovery yet, but the seeds have been planted. It is unlikely that they will germinate this summer, and it may take longer than that, but eventually they will sprout.
The lack of a housing recovery is the key difference between this recovery and every other one which has preceded it. The collapse of the housing sector is directly responsible for a quarter of the jobs lost, and indirectly responsible for many more than that. The loss of jobs has in turn depressed household formation, and thus further depressed the housing market.
Even extremely low mortgage rates have not been enough to get things going again. We still have extremely high vacancy rates, both of apartments and of houses sitting empty, although lately we have seen some improvement in the rental market.
"Until that excess is absorbed, it is unlikely that we will get anything like a robust housing sector, although even a tripling of the new home sales rate from current levels would bring us to what was considered a normal rate of sales back in the 1970’s and 1980’s. Back then we had far fewer people, and thus a lower need for places for people to live."
RB - I hear ya on all accounts and don't think housing has quite bottomed but my point is the homebuilders have probably built in quite a bit of this uncertainty and buying now as a starting point is not a terrible idea. Who are any of us to say we know for sure when housing will turn around?
ReplyDeleteRoBear,
ReplyDeleteAll that you are saying is good long term news for housing.
We need less houses built in order for the existing inventory to be used up. All these kids not moving our of their parents homes are future consumers of housing.
Unfortunately, it is going to take time to work through this, but when it is worked through, I believe it will be the beginning of a solid, long term market with very little speculation.
I have purchased a small Canadian lumber producer as my play on the rebound in housing. It has a good balance sheet, but is losing money, so the stock is very cheap. If we get the turnaround in the next couple of years, there is huge leverage, but could also go bankrupt if we don't see this.
hey David - You might want to take a look at the banks man...remember how we were saying that a good sign for a bottom was if the market could make a low, bounce, and either not make a lower low or if it does break through the other low, then if it comes right back up then that was a false breakdown? Well, that action is exactly what looks like is happening with the banks...
ReplyDeleteI don't think it's J6P buying this morning.
ReplyDeleteTOF- Great call the other day man. I honestly can't believe how well you do.
ReplyDeletethanks Mark...although I would have been much better off just dumping everything in DECK.
ReplyDeleteif BAC closes above $6.6 and C closes above $28 then you have bottoms in place to trade against...
Chavez's gold - "the market in physical gold is tiny, and largely comprised of nutcases"
ReplyDeleteSounds like puppeteers implementing mind control tactics in conjunction with yet another orchestrated take down? Is this telegraphing something about Bernanke's Jackson Hole appearance or related to sourcing Chavez's order? Interesting that Gadaffi is immediately ousted, is Gadaffi's physical a partial source for filling Chavez's order?
http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-12-billion-of-gold-to-venezuela/
the other day i was looking at TZOO and trying to figure out where the bottom might be on that. so I started looking at other internet companies in the past just to see how they traded and i couldn't believe how volatile they all were. Look at the moves in 2003-4 for NFLX. It went from $5 all the way up to $40, then all the way back down to $9. WTF. How many people that bought at $10 were honestly able to sit through that and reap the rewards 6 years later? it's a tough business, buy and hold, but if you have conviction to sit through those moves you can reap some major rewards. I'm not saying TZOO is NFLX, but it gives you a sense of how volatile they are.
ReplyDeleteI think an investment in MMYT over time will give you some pretty amazing, and amazingly volatile, returns over the next 5 to 10 years.
Gold down 4.4%, pretty brutal for those late to the party.
ReplyDelete1737.50 half way of recent move.
Now you see it now you don't.
T3d - Yeah a pretty harsh 7.5% move down from highs. 1,730 is somewhat important as it would be a weekly close below last week's lows. This is a good sign for equity investors.
ReplyDeleteIf you ask me, we have a short covering rally in financials which is where today's strength comes from.
ReplyDeleteT3D- Financials...I agree. Still sitting in cash other than MITK.
ReplyDeleteTried to figure out TZOO. Over my head.
TRX is peering over the cliff...
ReplyDelete(Just trying to flush JB out)
MITK, Mark that puppy has been like a piece of granite in this environment with the exception of a few days. It must feel really good.
ReplyDeleteThe nature of the market is trading very different than from the last two years, we do not have the benefit of the strong trend in our favor right.
If you want to trade it take when you see it.
BAL has been trading firm here for three weeks, a bit extended here daily.
ReplyDeleteT3D- Yep. I'm kinda like you. I'd rather step aside than try and swing trade short. Scalps, sure, but not with 'real' money.
ReplyDeleteAt the close boyz.
TRX - JB already exited that one, I believe.
ReplyDeleteHey Joe, you going to go surfing today? No, its gnarly out there.
ReplyDeletehttp://www.youtube.com/watch?v=G5urkjKQQZA&feature=related
I used to do this all the time at pipe.
man what a great wave T3d...you lived in hawaii? my cousin lived in kauai and would go over there a lot to surf....he loved it.
ReplyDeleteYeah TOF, I did that a lot in my twenties and thirties. The north shore wave is a Ferrari compared to the south shore which is a Chevy. Some of the fittest years of my life and what clean fun.
ReplyDeleteAll right back to the red screens.
http://www.youtube.com/watch?v=kbyqC1Rl2vk
ReplyDeletenice t3d. that's awesome man. do you still surf?
ReplyDeleteMark - TZOO the stock is completely different from the company. They have been growing tremendously and their European and Asian business is growing really fast. The stock is dirt cheap relative to other internet high fliers and is reasonable relative to their earnings and free cash flow (on pace for 25 to 30 million this year...vs $540 Million mkt cap). the best thing about their business model is it's scalable and they already have 24 million subscribers signed on to their service.
having said that, with another earnings report that misses estimates, the stock could trade down to $25ish...but lets be honest...over the next few years the odds are quite high that people will be falling over themselves to buy it back up again when they see that the company is growing revenues quickly, is profitable, and cheap. but it might fall 50% before then...
SVM - Wonder if BC was anticipating shorts wouldn't allow this some breathing room?
ReplyDeleteStill looks like the H&S is taking it to $0.50...
2nd - This is right up your alley:
ReplyDeletehttp://blogs.marketwatch.com/thetell/2011/08/24/the-case-for-terrified-bulls/
Grrr-
ReplyDeleteJust erased a long post by accident.
I will paraphrase. Got killed in TZOO yesterday as market surged. That simply doesn't happen for a high quality momo stock.
Listened to conference call and was severely disappointed.
-Management said they decided to take a shotgun approach to new markets rather than deeply develop them. IMO, that's the wrong approach for long term brand equity and business.
-When pushed by analysts, management said that to date, they had not yet determined the demographics of their customers. What?
-When pushed by analysts about the obvious cannibalization between product lines, management acted like they had no idea this was going on.
-When pushed by analysts to discuss the downtrend of their traditional business, they would not discuss it.
I may buy TZOO again based on the chart, but I have very little conviction holding onto it for the longer term.
I took a big loss in TZOO, rolled it into FDX calls and just sold the calls for 20%. All in all, I didn't make much out of the whole deal.
I wanted to hold my FDX calls till Sep. 16th. However, I started looking at charts this morning and noticed the action of AKS, PCX, SLX etc. yesterday. They should be absolutely surging. They are forming bear flags!
ReplyDeleteI then take a look at emerging markets like EWZ and EWA and they look like they are about to fall off a cliff forming mega bear flags.
I am bullish on the market based on a peaking 20 day put/call ratio, but there are quite a few charts indicating it could be a false signal imo.
Oh and I see comments like this out of Goldman. To me, this could be a set up.
ReplyDelete"Based on our conversations with clients, we believe investors would be very surprised if the speech did not include a discussion of asset purchases," strategists at Goldman Sachs wrote in a note to clients."
Then one just needs to take a look at the banks for general market direction. Those are not healthy bottoming patterns imo.
ReplyDeleteThis shaky market instills so much bullish confidence, it's taking the wind right out of the entire PM sector, LOL!
ReplyDeleteJesse - I looked at the mgmt presentation for TZOO and came away with a completely different take. I think this "big miss" was mostly attributable to increased advertising expenses, which I don't think is such a bad thing. Plus, revenues and earnings grew greater than 30% YoY and the trend is still up for it's fundamentals. However, the trend for the stock is clearly down so there's no way to know for sure where the bottom is quite yet.
ReplyDeleteRegarding the AKS/PCX/etc...look at NUE/BTU, not robust but not falling off a cliff. it seems like we have flatlined here but we're not quite ready to crash...then again, in a day or two I could be completely wrong.
This is from Leavitt Brothers who has been sending out awesome long-side stock picks for the past 2 years:
ReplyDelete" I believe we are in the beginning stages of a downtrend, not within a painful pullback within an uptrend. I looked at 1000 charts this weekend and could barely find a couple charts that are set up well. Most are in downtrends. Simple as that. Some have made a series of lower lows and lower highs. Others have dropped vertically and are now setting up in bear flags or rectangles. I don't see hidden strength. If I saw pockets of strength I may think a move up was possible because a group or two was ready to lead. But this isn't the case. The entire market (except gold) is trending down. That kind of inertia can't be easily reversed for an extended period of time.
News wise things can't get much worse, so from a contrarian standpoint, a buying opportunity should come soon, right? The problem is the debt issues in Europe can't be easily fixed, and as bad as the news out of Europe is, it could get much worse. The problems are years in the making, and while the stock market has been able to cover up the problems for a long time, things are unraveling in what seems like an uncontrollable fashion....... There will be more bounces, but in my opinion we are far from the lows in terms of time and price. Technically the market is completely broken, and it'll take months to fix."
"S&P 500 vs. S&P Bullish % Index: I show this for two reasons. 1) The indicator has made a lower low suggesting there's been a character shift in the market. 2) To show what the indicator did during the last bear market which tells us we may not be close to a bottom in terms of price or time."
"S&P 500 vs. NYSE 52-week Lows: Ditto here. New lows have spiked telling us there's been a character shift, but they are no where near replicating the last bear market which tells us we have lots more pain to come."
"We had several moves down the last 30 months that have gotten bought up. This move down seems to be the real thing. The selling intensity is greater than during any of the other pullbacks, and the Fed (yes a decent part of the 2+ year rally was assisted by the Fed) is out of tools. QE1 and 2 didn't work. Bailing out the financial industry didn't work. Low interest rates haven't worked. Spending money like crazy and digging ourselves in a bigger debt hole has not worked. Nothing has worked and now we have Europe which is collectively in worse shape than we are. The charts back all this up. I don't see a quick fix. There will be quick and violent bounces, but right now my bias remains to the downside."
Jesse - One other thing that gives me a little of hope is IYT, XHB, and XLI have all held yesterday's gains more or less. Yesterday was a big up day...so it's only natural to trade sideways after it....obviously these are risky times to be long...I think with gold and silver taking a nosedive here, the money should come into equities. Having said that, if we begin to peel back under $115 SPY and gold stays down then I will begin to get nervous.
ReplyDeleteJess - Also, if banks can close above their lows from the crash lows 2 weeks ago, they're setting up for a buy...if that happens then people will begin to chase things and think a bottom is in...I understand the long term trend but that doesn't mean the market can't rally further...
ReplyDeleteMorning, folks! I see extremely bullish signs for the market.
ReplyDelete1. After breaking above the resistance formed by 3 spikes in S&P futures, they pulled back overnight to consolidate at that level that became a support, and then staged a huge rally this morning that made another higher high. They pulled back from that spike, but now the pull back has stopped and futures have risen above yesterday's high already!
2. Gold continued its crash from yesterday, which suggests that the fear is coming out of this market.
3. As I had suggested yesterday, the breakdown in gold did telegraph the breakdown in TLT below the bottom of its 4-day range at $109.50, which happened today. TLT is trading at $107.XX already! I just added 6 more September $110 puts on TLT at $4.30.
TOF- If things set up in the market and TZOO closes the week around 30ish, I may take another stab at it on technicals alone. It should have a powerful reversal at some point based on the weeklies. Perhaps some money flow based on upcoming GRPN ipo.
ReplyDeleteMan, TLT is CRASHING now... It just broke below the high it made on August 10. I would have expected a crash in TLT to LEAD a crash in gold, since higher bond yields would make gold relatively less attracting as a place to park money in the short term. But now we have a crash in gold leading a crash in TLT -- I guess both of them were up because of the general fear, with gold being more sensitive to fear and thus reacting first this time around...
ReplyDeleteDepends what kind of a trader you are. Article in the Toronto Globe and Mail talking interviewing some of Canada's top value investors and they are taking advantage of this downturn to decrease cash and increase equities. US financials are a popular choice.
ReplyDeleteA bad technical chart often equals a good fundamental valuation.
Picked up NFLX 212.58 on this pullback. Should probably buy calls. Stop at today's lows....
ReplyDeleteNFLX "worm city" buy:
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=NFLX&p=D&yr=1&mn=3&dy=0&i=p38283809268&a=226821948&r=1000
I just saw that BAC is up 9% now! That will be another indicator I'll be watching for my TLT short in addition to the gold price...
ReplyDeleteI'm back to within $100 of breakeven on my GLD puts I bought last week.
ReplyDeleteIf GLD follows the same breakdown patter as SLV did a few months ago, targets down to about $125.
Looking at stepping into some more European banks (STD looks tempting).
Funny thing is LYG (LLoyds in England) is my best performing stock and NBG (National Bank of Greece) is my worst.
There's a clear inverse correlation between gold and equities over the past few days...pull up the 5 minute chart of gold futures and the ES and you can see it as clear as day. If gold continues to fall and the market doesn't lift then I will get worried...not sure how long of a time frame to consider that possibility over, but it would be an indication of a 2008 type scenario where everything tanked.
ReplyDeleteAgree TOF, that would be a signal to seriously reduce equity exposure.
ReplyDeleteTOF - How can a mere rock be used as a navigational aid? Yes, there has been an inverse relationship with PM's and most everything else lately.
ReplyDeleteGenerally speaking though, PM's have exhibited a positive correlation with equity prices until just recently.
I think of these as planets rotating around a solar system in an elliptical orbit.
You think of gold as a mere rock, to me that rock is at the center of the orbit.
Exited NFLX even. Gonna wait for the close on this one. CMG looks like a good short.
ReplyDeleteJesse - Check out the mgmt presentation for TZOO:
ReplyDeletehttp://files.shareholder.com/downloads/TZOO/1378931104x0x484867/db7d7f9f-61c8-439f-8f45-a0707fc4eb0b/Travelzoo_webcast_presentation_07-21-11.pdf
Look at the rev growth in Europe (p.7 of slide). They grew European revenues over 100% from Q4 2009 to Q2 2011. It's now making up like 27% of total revenues...
In a flat market leading out of a bottom, we should see the momos following through on the upside. Here is the momo watch list I posted the other day.
ReplyDeleteNFLX -4%, SFLY -3.5%, GMCR -3%, MITK -2%, IDCC -2% LULU -.5%, GTLS TZOO flat
Gold - I wouldn't be surprised to see a price of $1692, $1553 is the next level under that and $1475 is the 3 year trend line.
ReplyDelete"If GLD follows the same breakdown patter as SLV did a few months ago, targets down to about $125."
I expect the 144SMA will serve as the downside limit.
jesse - take a look at the long term revenue growth for TZOO:
ReplyDelete2000 - $4 MM
2001 - $6 MM
2002 - $10 MM
2003 - $18 MM
2004 - $34 MM
2005 - $51 MM
2006 - $70 MM
2007 - $79 MM
2008 - $81 MM
2009 - $94 MM
2010 - $113 MM
2011 - first 6 months: $75 MM
Also from 2003 to today shares have been reduced from 20.5 Million to 16 Million (and probably lower after recent buyback announcement).
"In a flat market leading out of a bottom, we should see the momos following through on the upside."
ReplyDeleteSince there is still a lot of fear in the system (VIX is at 37 now!), it is only natural for traders to start wading back into the market *cautiously*, starting with solid large caps first. Maybe that's why S&P is outperforming the momo stocks now...
TOF, do you have the same info for the annual EPS of TZOO?
ReplyDeleteTBT has the nicest looking intra day chart I can find.
ReplyDeleteDavid:
ReplyDelete2000 - $0.02
2001 - $0.02
2002 - $0.04
2003 - $0.10
2004 - $0.33
2005 - $0.45
2006 - $1.01
2007 - $0.57
2008 - $0.19 (not sure about this b/c they had something weird with taxes and one time charges)
2009 - $0.32
2010 - $0.80
2011 - $1.45 estimate (first 6 months were $0.60)
It looks like revenues are definitely smoother trending primarily because they're investing in growth of their business which hits EPS from time to time...but EPS is on a steady trend higher and higher over time.
I just read that Motley Fool added them to their Rule Breaker service. Fool is what it is, but I used to subscribe to this service 6 or 7 years ago and they had some really good longer term secular trend picks that worked really well. MIDD and BWLD were two of them that I remember they were high up on back in 2003 or 2004 from what I remember.
TOF, so which company's stock (TZOO or MITK) do you expect to do better over the next year, assuming we get a 0% GDP and S&P oscillating between 1000 and 1200?
ReplyDeleteSome news from CBO:
ReplyDelete***
Economic growth will remain slow but steady, the July report from CBO says, increasing by 2.3% this year and 2.7% next year. In a blog post on the agency's website, director Douglas Elmendorf notes those projections were made in early July before financial market gyrations and some lackluster economic indicators.
The budget deficit this year will remain at about $1.3 trillion, the report says, marking the third straight year of $1 trillion-plus deficits. That's 8.5% of the nation's economy.
Thanks to the deficit-reduction law signed by Obama on Aug. 2, the deficit is projected to fall to 6.2% of GDP next year and 3.2% in 2013, the agency says. That assumes all the savings envisioned in the bipartisan deal materialize and the tax cuts enacted in 2001, 2003 and last December expire on schedule -- an unlikely scenario. It also assumes sharp cuts in physican payments under Medicare -- also unlikely.
"If some of the changes specified in current law did not occur and current policies were continued instead, much larger deficits and much greater debt could result," Elmendorf said.
***
With such deficits on the horizon for years to come, I would start scaling into CEF now, if I had a lot of cash on hand...
S&P futures made a higher low intraday today and are on the way to making a new high for the day.
ReplyDeleteDavid - I would take TZOO over MITK...I think MITK has some serious issues that make me nervous about it: namely, they recognize revenues up front when they sign deals with banks, so the revenues numbers the past 2 quarters included big signings from BAC, COF, etc...second, they booked over a year's worth of revenues from JPM last quarter despite in their quarterly filing saying they couldn't recognize revenues until after all services with JPM have been launched (presumably Photo Bill Pay, which hasn't been launched)...third, I don't like that their finance director was writing a positive research report on the company even if it was before he joined the company. I think the company is way too risky to put a lot of $$ in it.
ReplyDeleteI like TZOO, MMYT and IBKC a lot as long term secular growth stocks. If I had to choose one for the long term I would recommend scaling into MMYT over time and keeping in mind that it could be down 50%-75% at any point in time but still be in an uptrend.
S&P futures just made a new high for the day (and consequently, for the past few days). The crash in TLT continues. September puts on bought on TLT yesterday are up 50% already -- nice. :))
ReplyDeleteI think TOF was correct in saying that we are seeing the right side of the W now, and this rally can take S&P to 1250.
C and BAC are confirming that a bottom is in for the financials, for what it's worth.
ReplyDeleteAt this rate, TLT should hit $104 tomorrow and make a dead cat bounce at that support level.
ReplyDeleteYep, both C and BAC are above their August 8 low now...
ReplyDeleteI wonder what happened with unravelling of the financial system in Europe? Did they find some magic glue once again?
TOF- Thanks for the TZOO info. I'm still stalking.
ReplyDeleteThe most oversold stock I can find on a daily and weekly time frame is TEX. $14 stock. $1.5 billion market cap.
-Lots of insider buying above current levels.
-$6.7 billion in revenue next year.
-$2.12 eps estimate next year.
-$100 stock in '07
- $40 stock this year.
Bought a bunch in 14.40's and will add if it dips. This is one I have no problem holding as long as it doesn't break below today's low...
David - Great trade on TLT. Just b/c we're in a downtrend doesn't mean we can't rally...plus, with strong earnings, good corp balance sheets, and some decent econ reports mixed in with bad ones, there's only so much they can press it down without a bounce. A nasty recession isn't a done deal yet.
ReplyDeleteIf we're in a true bear, then I still wouldn't be shocked if we rally to prior support of 1,250 or even to the 200 DMA and turn lower. that's another 70 to 90 or so S&P pts higher.
ReplyDeleteGreat article on the widely read ZeroHedge blog today:
ReplyDeletehttp://www.zerohedge.com/contributed/danger-qe-3-%E2%80%9Chope%E2%80%9D-rally-going-end-terribly
If this is the kind of expectation the market is having about Friday, then I am not afraid anymore. :)
Jesse, do not know who Leavitt Brothers are, but think they are spot on.
ReplyDeleteSo if Gold and bonds are selling off where is the money going? Not into stocks at the moment that's for sure.
BTU catching bid -40.50% form Apr and -27.86% from Jul highs.
Gold will be above $3000 before its all over and most likely conservative number.
Good short term call on gold David. Since we have had two margin hikes in gold in the last 48 hours makes sense. Silver chart has clues as to what could happen to gold going forward, not that bad. If gold gets to 1550, I'll double up.
TOF, I was a boogie boarder and not in three years since my knee operation, but could happen any day now.
S&P futures are having a beautiful classic pattern of higher lows and higher highs since they opened on Sunday night...
ReplyDeleteT3d -- I didn't make any calls about gold yesterday, so I cannot take no credit there. I only said that yesterday's crash in gold is most likely telegraphing today's crash in TLT, which it did.
ReplyDeleteIf someone put a gun to my head here, I would buy BTU, A, TBF.
ReplyDeleteBTU looking great!
ReplyDeleteTyler Durden himself seems to be in a disagreement with the previous article I posted from ZeroHedge:
ReplyDeletehttp://www.zerohedge.com/news/operation-twist-expectations-or-lsad-returning-vengeance-explains-todays-moves-stocks-and-gold
Somebody put a gun to my head.
ReplyDeleteBought EXM and FRO at the close.
Holding TEX, EXM, and FRO. Stalking TZOO.
Love the potential of TEX.
CSFB TEX $3.90 eps est. for 2013
ReplyDelete"Furthermore,
solid backlog buoys our out-of-consensus view that the recovery in cranes is real.
We raise our 2011 EPS to $0.96 based primarily on the Q1 beat (tied to BUCY
gain), and slightly due to better AWP demand. For 2012-2013 we maintain our
EPS of $2.80 and $3.90. Our $53 TP assumes 15x our 2013 EPS,
CSFB shipping comments:
ReplyDeleteAlthough imports have been soft, a rebound is expected in the second half of 2011 – not
only by transport carriers (who are relying on customer feedback), but also from the
National Retail Federation (NRF). Recall, the NRF and Hackett Associates forecast for
monthly import volumes for the top 10 U.S. ports has been a good predictor for actual port
volumes – with a 94% correlation from January 2008 through May 2011:
Using the NRF and Hackett Associates monthly forecasts for total U.S. import volumes
from July through December 2010, we have extrapolated the monthly West Coast inbound
volumes using the historical market share of approximately 65%.
Looking ahead, the NRF estimates are not calling for much in the way of year-over-year
growth through August, but this is expected to accelerate with September up 10%;
October up 13%; and November up 15% year-over-year.
“2011 is turning out to be an uncertain year for shipping…the good news for the
coming few months is that inventories are too low, which will generate shipping
demand as the supply chain moves to re-stock, albeit cautiously.”
"
Jesse - Check out the headcount growth for TZOO in the past 2 quarters:
ReplyDeletehttp://files.shareholder.com/downloads/TZOO/1378931104x0x484867/db7d7f9f-61c8-439f-8f45-a0707fc4eb0b/Travelzoo_webcast_presentation_07-21-11.pdf
Look at p.10. In the past 3 quarters they have grown headcount by almost 50%. Just think of the impact this has on EPS until these new staff people are up and running and making deals...they are predominantly for the Local Deals business which means they are most likely salespeople and I would imagine the lead time for the sales people is long. If that is the case then a good deal of the people hired in the past 2 quarters most likely weren't making a big impact on revenues while hitting the bottom line. However, you will most likely see a nice uptick in revenues in the next quarter or two that could provide significant upside to EPS.
Gold - $1750 is the 38.2 Fibonacchi
ReplyDeleteJobs steps down as CEO. Q's down 1.2% after hours. The world is slowly falling apart in front of our eyes. In comparison, this isn't news.
ReplyDeleteThe down open will be bought aggressively.
This is huge news. Now that AAPL will no longer be relevant, the consumer will now start spending money on the other 99% of the economy. The market soars:)
ReplyDeleteLazy U.S. consumers (Apple cult) stop spending $4,000 per year on AAPL products and shift focus to reading their email in-boxes and start putting hundreds of billions to work in Travelzoo's "local deals":)
ReplyDeleteJesse - Yahoo just posted a link to AMZN boosting up their local deals biz:
ReplyDeletehttp://finance.yahoo.com/news/Amazon-brings-new-local-deals-apf-494798028.html?x=0&sec=topStories&pos=2&asset=&ccode=
This is probably why TZOO and OPEN have traded so weak of late...especially TZOO. The market will most likely group them together, even though the deals that AMZN is pushing aren't the same as the ones that TZOO pushes. I suspect this is the impetus to push TZOO below $30...
Here's a deal on Amazon local:
"Mobile Auto Detailing
My Premium Car Wash" for $60 ($120 Value)
Another one:
Four-Hour Photo Safari
Chicago Photo Safaris $59 for $119 value
Another:
"Seven-Cookie Bouquet
Cookies by Design" $27 for $56 value in Los Angeles
Different target markets but the stock market won't care...TZOO will probably get sold off further..
AAPL - Agreed, now Apple becomes like Microsoft and product ships before any product testing takes place...
ReplyDeleteWill Friday be Chubbie Checker day?
ReplyDeleteCome on baby, let's do the twist!
AAPL - There were rumors Jobs would step down spread on twitter yesterday (maybe everyday?).
ReplyDeleteWonder when MS buys RIMM?
ReplyDeleteJesse - Check out this article and the comments about TZOO:
ReplyDeletehttp://www.tnooz.com/2011/08/12/news/a-travelzoo-local-deal-success-story-not-exactly/
Very interesting...the owner of the business posted and was pretty upbeat about the brand.
new post
ReplyDelete