Tuesday, September 6, 2011
09/06/11 I was schooled with a strap right across my back
I agree with BB- one has less chance of finding euphoria in the markets right now than Thomas 'wood Henderson had of finding it combing through the hotel carpet for slivers.
Go ahead and short this market- like a strap across the back. But it's all right, bro.
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This is your final warning, tof. Get the ---- out while you can.
ReplyDelete2nd - again man...i'm 20% long BGZ, the rest in cash...i agree that there is a good chance we rally more here but the risk (and you can't ignore it) is to the downside ultimately. if we rally to 1,230-1,250, i will get aggressively short.
ReplyDeleteWhy not just wait 'til 1250?
ReplyDeleteDANG - Yes TOF, the VIE structure is a huge question mark in my mind. Then again, so would be a US mining operation on US government land. No surprise, SVM is an VIE enterprise.
ReplyDeleteThe reason being to my understanding, a VIE structure is necessary, is that foreigners are not permitted to own Chinese assets.
Oddly enough, shorts never seem to mention this particular argument in their theorem.
2nd - Until these start falling:
ReplyDeletehttp://www.cnbc.com/id/38451750
http://www.bloomberg.com/apps/quote?ticker=.ITAGER10:IND
http://www.bloomberg.com/apps/quote?ticker=.SPN:IND
http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND
And the market recaptures it's 200 DMA, outside of a short term bounce I don't think anyone can have confidence that it's safe to be long...Can you make money over the next 10 years investing right now? Absolutely...but I'm more interested in getting better deals between then and now and I think we'll get them.
Having said all of this, I re-entered my long C after hours just now...long $27.86...the Inverted H&S pattern looks like a good entry point, giving me a defined downside risk target...my stop is below today's low...or at $26.4.
ReplyDeleteMark - Are you looking at RAS at all? Please talk me off the buying ledge again...I can't shake the thinking that they have turned the corner...I know there was some speculation that the SEC would crack down on mortgage REITs and I believe this hit the stock last week, but it's looking like a decent low risk trade at this point and possibly even a longer term hold if they can grow dividends...
ReplyDeletewow DB is down almost 50% from July 1. same with BCS...
ReplyDeleteLooks like LYG is going the way of NBG/IRE, etc.
Sold my C long at $27.9...pocketed an enormous $10 after commissions.
ReplyDeleteYou will probably be the only person in the nation that will have to pay taxes on C this year.
ReplyDeleteSEC crackdown on MREIT's? That's a new one on me, what could the SEC possibly have against them?
ReplyDeletePMI - Discounting the possibility of fraud (as if the market isn't fraudulent in and of itself!), I think the chances of PMI delisting are much greater than DANG.
ReplyDeletePoor OLE cali stuff cracks me up. Still the most affluent area around. All the Cali people on the dole are exiled to Arizona. Half of Tucson is drawing Cali disability.
ReplyDelete"the only person in the nation that will have to pay taxes on C this year."
ReplyDeleteAnd I'll add, the IRS certainly won't be overlooking the opportunity to collect those taxes.
"Half of Tucson is drawing Cali disability. "
ReplyDeleteAnd about half of the world is drawing on US disability.
Nikkei +1.7%
ReplyDeleteC - An interesting HnS, it is, with gaps down in right shoulder that need filling.
ReplyDeleteI won DSWL for my China play.
ReplyDeletePay a 6% dividend and have for years, have been on the Nasdaq for over 15 years. They've got a bunch of factories making electronics, plastics, etc.
Market cap is $50 million, with $37 million in cash and no debt. Are losing money and have to deal with increasing wages, etc. but are managed well and don't think any chance they are another Sino-Forest.
TOF,
ReplyDeleteI own LYG. I think it's huge retail franchise will come through for them. They are kind of stuck in the same situation as BAC where they bought a big mortgage lender (HBOS) during the crisis and the cost turned out to be a lot higher than what they paid.
UK government still owns a lot of them and they are the UK "too big to fail" bank, so won't be forced into bankruptcy and the earnings from retail will cover a lot of sins (in my opinion).
Updated my TZOO local deals tracking....I definitely am missing some data so this tracking is an estimate at best:
ReplyDelete$1.22 Million local deals sales including a roughly estimate for direct purchases over the past week and 11 hours. Extrapolating that over 75 cities and the span of a month yields $7.5 Million in monthly sales, which is lower than the rate I was tracking a week and a half ago. Assuming this run rate, revenues would be lower than estimates at $35.3 Million. Given the way the stock is trading, I wouldn't be surprised there is more downside to come when the earnings report hits...
Damnnnn BB...and I thought I like risk! You're long LYG AND NBG!?!
ReplyDeleteSeriously, though, what's the share count on LYG now relative to 2 and 5 years ago? I'd have to assume significantly higher no?
The U.S. Postal Service is on the verge of financial collapse and should eliminate Saturday delivery, close thousands of local post offices, restructure its health plan and lay off 120,000 workers to survive, according to Postmaster General Patrick Donahoe.
ReplyDeletehttp://www.latimes.com/news/nationworld/nation/la-na-post-office-20110907,0,4018496.story
Should be a boon for STMP right (and to a lesser extent FDX/UPS)? I'm assuming that's why STMP is rallying so hard...
VIE - I think the concern relates to the lack of direct ownership, without which, there is no absolute guarantee of sharing in the proceeds but almost guaranteed participation in the losses.
ReplyDeleteThey cannot lay off 120,000 dysfunctional gun-toting lunatics who already have chips on one shoulder- that would be insane.
ReplyDeleteSTMP - I'm guessing something material happened on or about July 28th, else the gap up is liable to fill... Sometimes those gaps fill regardless.
ReplyDeleteI still think we should open a chain of shooting ranges located within "spitting" distance of the remaining post offices.
ReplyDeleteI think in the current market, there are 2 positions:
ReplyDelete1. Stock valuations are cheap and once the political / debt issue get dealt with, stocks will appreciate to more normalized values. Even with a minor recession, stock valuations are still good and good stocks should do well. There are a lot of stocks a look at who don't have to do anything different than they've done in the past and get a traditional valuation and they will go up 50% or 100% or more.
2. Things are a mess and will continue to drive markets down. the debt has not been dealt with and will come back to haunt. Sell everything and get liquid. The only safe thing to buy is Gold.
The problem with #2 is that everyone is prepared for it. It's not like companies are overvalued, embarking on risky expansions or overleveraging themselves at this point in the cycle. If the worldwide economic growth drops to 0% (note, forecasters are calling for 3% - 4% growth), I really don't see most companies getting hurt that much (think about MSFT, XOM, WMT, etc.). Even a company like DD will be fine in 0% growth world I think.
That is why I think we will be up substantially from here over the next several months and years and I am with 2nd in holding for long periods of time here.
TOF, you obviously trade well and have a good feel for short term markets and are doing well this year, and if the turn started today, I'm sure you'll get out with the bulk of your profits intact. As of August, I am not down a couple of percent for the year, but really am not overly concerned at this point.
cp- I like that idea! We could also open a few junk car lap tracks and allow them to unleash their road rage among 'friends.'
ReplyDeleteWe might combine the two and call the chain Mad Max Gone Postal.
ReplyDelete'Dad! We're going postal down at Max's.'
'Have fun, son.'
ReplyDeleteYeah TOG, I know re the LYG share count - it's huge. It's kind of like what happened to C, except no reverse split.
ReplyDeleteI'm looking for $6 in the stock, plus the dividend reinstatement - would be a $100 million market cap.
We'll see - it's not a large position.
I know it sounds like I'm about to veer into DTs, but I have yet to hit my daily meds.
ReplyDeleteThat's Drinking Topics, not Delerium Tremens.
ReplyDelete+200 gap up on the DJIA.
ReplyDeleteThink about it, man. How many traders threw in the towel this morning?
ReplyDeleteI'll bet a week from now Hulbert comes out with one of his:
ReplyDelete'The DJIA is now 1000 points above where it was at the August lows, yet the average recommended exposure among ST newsletters tracked by the Hulbert Financial Digest is now 20 points LOWER than it was then!'
BB - Yeah it's a tough call from here man. I think there is significant risk to the downside that the majority of the public isn't accounting for....the buy and holders like you and 2nd that see no shot in hell of having a repeat like 2008. While the odds of that happening are slim, I wouldn't discount anything at this point given how bad the situation is in Italy and Spain. The idea of an issuance of eurobonds prompted S&P to say that Germany would be rated the same as Greece. While the market won't come to that conclusion, just the thought of them significantly downgrading their bond ratings significantly could cause some much unwanted panic.
ReplyDeleteOn the valuation / cash fronts: while corporations may have more cash than ever, I believe if memory serves me correct they also have the most debt they've ever had. And one of the things I remember from reading about the Great Depression was that corporations hoarded cash and Hoover tried as best as he could to get them to spend and hire people but they refused.
Also, Grantham and others have pointed out that while valuations look great, a large portion of that profit has come from government spending and as that begins to contract over time, it will definitely have an impact on profits. I personally don't think the US government will be doing any significantly reductions in spending until the bond markets truly force them to do so or until our foreign trading partners force them to do so. So I doubt that will be as big of an impact as Grantham / Hussman say it will be, but it will nonetheless impact sentiment. And Europe cutting back on spending has clearly had a negative impact on their economy.
Can we rally in the short term? Of course man...anything is possible...but I think we're gonna be seeing lower lows within the next weeks/months.
2nd - You're gonna get these gap ups right one of these days man!
ReplyDeleteSure. I want another string of them. Starting Wednesday, and ending +1000 points from here.
ReplyDeleteWhat's sad is that +1000 points only takes us to 12000.
ReplyDeleteMake that +3000 points. That would kind of do it for 2011.
ReplyDeleteif I had to bet on the short term movement of the markets I'd say we retest 1,100 first before moving higher. It's at that point that a move to 1,250 would be likely in my mind, assuming Italy doesn't require an immediate bailout.
ReplyDeleteBB - On the plus side for the economy is the following in my mind:
ReplyDelete(a) Housing - given that housing has never really bounced, the downside risk as this point really isn't nearly as great. I mean a 25% drop from the current housing starts numbers is basically nothing when compared with a 25% drop from 2005 levels.
(b) Autos - same as a above.
(c) Given lower housing prices and low mortgage rates, the cost of owning a home is now better than it's been in a long while when compared with renting.
Because of a and c above, it's one of the main reasons why I really want to own financials if I can just get past the risk of a nasty drop off due to government debt spirals. Also, the other problem is while those two things above limit the downside, the chance of them turning around quickly any time soon are not too good.
In all honesty I'm a little annoyed at my impatience with holding winners. I'd be halfway there to my millionaire goal if I held MITK...
ReplyDeleteBuy and hold, bro. Buy and hold.
ReplyDeleteTOF, I don't buy many large companies as I think there are better opps in small ones, but I look at companies like MSFT, WMT, DD, XOM, etc.
ReplyDeleteAll of these have excellent balance sheets, reasonable to no debt, excess cash, good valuations, are not really extended at all, so even if we have a 2008 type event, their stocks would get hurt, but their businesses would not really suffer that much.
Financials are where I think a lot of money will be made over the next few years. Picking the right ones willdrive excess profits as the winners emerge. I've got a lot positions in insurance as they are safer and very cheap, but also some snall banks like SNBC and others. If you look back to the early 1990's and the D&L crisis, a lot of money was made coming out of that as well.
I've also invested in a really small lumber Canadian lumber company as a play on the housing rebound. 10 saw mills and a market cap of $15 million - will either die or be a big win.
ReplyDelete2nd I agree in theory withb&h but I've actually done better over the years trading. Redf comes to my mind..im up about 30% to 35%the over the value of what my port would have been if I b&h the redf shall I bought 1 yr ago
ReplyDeleteBb what's the ticker on the lumber play
ReplyDeleteTF - My impression - You in sunny California are doing well compared to us in the hinterland.
ReplyDeleteYou guys have been busy tonight. Good stuff.
ReplyDeleteBartz..NO ONE can be surprised.
ReplyDeleteTOF- The ticker is CHOP.
Correct me if I'm wrong, but I see green across Asia tonight, and Europe closed green...
ReplyDeleteOut of Glacier NP. Through Glasgow, MT. Currently in Grand Rapids, MN heading to Porcupine State Park, UP.
ReplyDeleteHave so much to say, so will say very little.
TOF- good call on laying off CVV for the moment. Charts say suckers are buying here.
David- I travel because Semester at Sea (Semester of Sex...bunkmate had exactly 23 "visitors" in 60 days in sea) lit my fire in 1996 and made me cognizant of the fact that Americans simply do not travel abroad and have zero perspective on the other 97% of the world and therefore can't anticipate what's in store.
SPX has hit my target of "1220-1240" on my temporary blog and the nasdaq has since basically hit my "trade down to 2400 before 2500 before going significantly lower" target.
Probably a good time to be going long.
TZOO fundamentals totally and utterly suck. Listen to the conference call again. Having said that, if the market rallies, it has an excellent setup....
lots of notes from traders i'm reading see more upside...can it all be that simple?
ReplyDeleteBB - just saw this note on LYG:
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8744334/Cost-of-insuring-RBS-Lloyds-against-default-at-new-high.html
Thanks TOF - LYG is risky, but pretty much no good news priced into the stock here. It's similar to a BAC in that they both have really strong retail franchises and if they could just put their past problems behind them, their current business will generate tons of cash.
ReplyDeleteGold down $30 this morning - maybe a double top here. Anecdotally, my cleaning lady (who has no investments) was asking me how to invest in gold last week.
Added another 3% BGZ at open at $41.8.
ReplyDeletethey're really squeezing the bears.
ReplyDeleteTNX/TBT appear to have made perhaps a significant longer term bottom yesterday. This may be bullish for equities for 1-3 months. Will have to look at my charts when I get a chance next week.
ReplyDeleteillini- Pass the doobie to tof.
ReplyDeleteI'm going to call the YHOO board and nominate JB.
ReplyDeleteMan, did I over sleep...Cash will do that to you I guess.
ReplyDeleteAdded another 2% BGZ at $41.6
ReplyDeleteBought some NLS at $1.6
ReplyDeleteI hear monetization in euroland is back on the table. Monetization everywhere it seems, proving once again, good for equities prices?
ReplyDeleteMark - RAS?
ReplyDeleteAdded another 2% to my losing BGZ position at $41.4.
ReplyDeleteCP - Where do u see that?
http://www.thestreet.com/story/11240705/1/german-court-rejects-eurobonds.html
Simple gap fill trade. 2000 SDS @ 23.65.
ReplyDeleteRAS. Yeah, I need to understand what they are doing with that offer. It's actually old.
It's funny to me how shorting a downward sloping market is hard...
ReplyDeleteMark, it's a lot easier being at Eastern guy for trading the markets. I remember when I had to do work in California and made for tough mornings getting up to get the news before the markets opened.
ReplyDeleteGLD down over 4% and TLT down almost 2%. Says to me like money is coming out of the safety trade and into equities. We could see some panic type buying if this continues as a lot of funds are out of position for a move upwards.
BB - I think we need to give the market more than a day or two's worth of rally to confirm that gold going down means risk is coming into equities.
ReplyDeleteIf it holds for a couple of weeks then you're right...otherwise, I'd argue that Gold coming down will be confirmation of a falling global economy...i.e, replay of 2008
For bears only...AAPL.
ReplyDeleteBB- Yeah, I bet. Got back late from a meeting last night and that throws my whole system off.
Added to BGZ another 2% at $41.62
ReplyDeleteAlso, just working on my day trading skills again. Baby sitting MITK for all this time has eroded my 'skills'.
ReplyDeleteMark - You kicked ass on that MITK buy and hold. I wish I could have had more patience but the position was too big for me to sit through the ups and downs. That's usually my problem...too large of a position. Part of the reason why I'm scaling into BGZ...
ReplyDeleteTOF- Thanks, and it was way too large for me also. Looks like JB is the sole survivor now ;)
ReplyDeleteThe politicians have the ball this week...probably best to just sit on the sidelines here...but I can't shake the feeling that we are going to see a repeat of the debt ceiling reaction. Lots of hope...
ReplyDeleteTOF - That's what I heard on the radio early this morning, the news apparently sparked a futures rally.
ReplyDeleteI found this article as well:
"German stocks rebounded from four days of losses as the nation’s top court rejected lawsuits against its participation in European rescue funds and a report showed industrial production surged in July."
http://www.bloomberg.com/news/2011-09-07/german-stocks-rise-for-first-day-in-five-infineon-rwe-advance.html
http://image.minyanville.com/assets/FCK_Jan2011/File/September11/todd971.JPG
ReplyDeleteinteresting picture...might be worth taking a LT bearish position on GLD soon here...
Good point TOF. If we see equities and gold falter together, watch out below.
ReplyDeleteI don't think this will happen thought as the company news I have been reading is quite positive for the most part.
Just bought a small Energy Services Company called GasFrac Energy Service (GSFVF.PK).
They are small with a new technology, but could be explosive growth if they continue to execute. P/E on next year's earnings is around 7 and targets for the stock are double the current price.
Good writeup on Seeking Alpha http://seekingalpha.com/article/291990-gasfrac-in-spite-of-results-beaten-down-by-weather-bright-future-ahead?source=yahoo
"interesting picture"
ReplyDeleteYep, I remember those days well in Japan, lots of beaming faces just before the SHTF.
Got to run..OK, walk briskly. I'll catch you cats at the close.
ReplyDeleteMark - We're probably way too early on our BGZ/SDS position...looks like we are forming a head and shoulders pattern again...it seems like the market likes repeating these patterns over time...for a while it was forming these inverse head and shoulders patterns, then it was forming these W patterns....now it looks like we have more upside to 1,200-1,220 ish...
ReplyDelete"I don't think this will happen thought as the company news I have been reading is quite positive for the most part."
ReplyDeleteBB - I remember corporate news being pretty good for the latter part of 2007 and 1st half of 2008...it seems to me that the corporate world isn't exactly a leading indicator.
Ok I added my last BGZ at $40.98...avg is now $43.7...long about 33% of port...
ReplyDeleteThe gap was just filled from the drop on the jobs report on Friday. I will use a move above 121.5 as a stop out...would be painful but the market is a volatile mofo right now.
Bought a few SPY Sept 30 $119 puts at $3.88
ReplyDeletetof- This is no joke: I think we ramp up hard into/following Obama's speech. Not b/c of the speech. But b/c there is NO EUPHORIA whatsoever right now.
ReplyDeleteThat is true TOF, but we did have some industries starting to show the bad news in 2007 which I don't really see now. Also, we have valuations on our side this time which we did not back in 2007. I was looking back through some notes on stock purchases in 2007 and had written "reasonable purchase with 17% upside in the current market" whereas in 2006 and now, this stock is at a 35% discount.
ReplyDeleteYour point is well well taken though - it's easy to find news to fit your opinion of the market if you are not careful.
2nd - Yep it's absolutely possible man....really given the roller coaster moves over the past 4 weeks anything is possible.
ReplyDeleteThere has been a relentless push higher since the open yesterday which most likely means the bears keep trying and getting stopped out...volume is quite light so that's most likely what's happening.
"That is true TOF, but we did have some industries starting to show the bad news in 2007 which I don't really see now. "
ReplyDeleteYou don't see bad things happening in the banking industry? How about semis? Keep in mind that a lot of the "beats" lately were on reduced earnings estimates...
We definitely don't have confirmation of a recession yet so I'm trying to remain unbiased...I'm just trading at this point and the fact that I have 65% of my portfolio in cash means I don't have a ton of conviction one way or the other.
Man all of this talk about YHOO got me to actually look at the company...they have $7.5 Billion in net cash, with a market cap of $17 Billion.
ReplyDeleteThat might be a great buy and hold at this point. Are you telling me that the value of all of their assets after backing out cash is only $10 Billion? really?
ZINC - Horsehead metals?
ReplyDeleteYHOO - I still own 10 shares I bought back in 07 or 08 in the mid to lower 20's, I think it was... ;)
ReplyDeleteZINC - There's an open gap down from $12.16, and a brief look at their number seems decent but their margins aren't what I'd like to see...
ReplyDeleteHere's what I mean by good news (just from today):
ReplyDeleteBofA lead financials higher
Oil rally's 4%
Hess pays $593 million for half of Consol Shale
Southwest Traffic up 3.9%
US Retails Sales up 0.4%
Staples CEO doesn't see another recession
Job Openings rise to 3.23 million
No dramatic change in patterns - Ebay
Viterra net nearly doubles - all 3 units profit up
Conn's posts 2nd quarter loss, sees year above estimates
FuelCall loss narrows
There is lots of good news. Even within the financials, I really see things as improving and the subset of small banks I own and follow in detail are, for the most part, doing better than last year.
Semi's aren't really out of line with the overall market, just more volatile as per usual.
Earnings did not only beat estimates, but were up ion Q2:
According to Thomson Reuters, S&P 500 reporting season is virtually
complete, with over 98% of the index having reported Q2 results. Overall results
have been strong, with 72% beating on earnings and 74% beating on revenues. The consensus estimate of index earnings growth
in Q2 is 12% (20% excluding financials), up from the initial estimate of 7% (14%
excluding financials). The consensus estimate of revenue growth is 12%, up from
the initial estimate of 10%.
Sure, things aren't perfect - they never are, but looking at companies results they do look good. Sure, we can worry about the Euro now, Italy last week, Greece the week before that, the debt ceiling debate before that, etc. There is always something. But companies are dealing with these and generating the profits. That's what will matter in the long run.
You are right that we could get another 2008, but with so many people focused on watching for it and making sure it doesn't happen, I don't see how we could end up with another disater.
YHOO is an interesting, but I find frustrating stock. They seem to have so much potential, but can't seem to make it work very well.
ReplyDeleteThey've only made over $1.00 a share once in the last 10 years and they always seem to have excuses as to why they can't make more.
They've got big overseas holdings which are worth a lot, but they seem to be having problems with Alibaba and getting things stolen from them.
There is value in the company, but Gerry Wang couldn't seem to bring it out (once he turned down MSFT's generous buyout) and Carol Bartz didn't seem to do much either. Probably if you are patient, it would be a good buy, but personally, I'd rather wait and see where they take things.
Rumors lift China stocks in Asia
ReplyDeleteSeptember 7, 2011 (Chinavestor) Rumors that monetary tightening is about to end sent China stocks to a broad rally on the Mainland. The Shanghai Composite Index (SHA:000001) surged 45.6 points or 1.8% with all but one of the 50 largest components of the index advancing.
http://www.chinavestor.com/technical-analysis/pre-market-report/73211-rumors-lift-china-stocks-in-asia.html
Be nice to see China stocks rally.
ReplyDeleteI think we need that to get the overall market moving upwards.
Added a few more SPY $119 Sept 30 puts at $3.6...avg is $3.7.
ReplyDeleteBB - Yeah its crazy just because I know how much I and my friends use Yahoo for a lot of their things, from mail and finance stuff to fantasy sports and maps. They really should maybe consider selling off some of their businesses...the combined value of these businesses has to be worth significantly more than $10 Billion (value of company excluding cash).
ReplyDeleteRegarding Obama's jobs speech > haven't we already gone down this path multiple times since he was president? Not only can they not get jobs growth to come to fruition, but they can't seem to get much of anything substantial passed...
ReplyDeleteAnd didn't we just get reprimanded by the ratings agencies for spending too much? WTF...why can't we just let the system operate freely, get the crappy loans washed out through default, and get on with the real recovery?
20 Quotes From European Leaders, with links:
ReplyDeletehttp://theeconomiccollapseblog.com/archives/20-quotes-from-european-leaders-that-prove-that-they-know-that-the-financial-system-in-europe-is-doomed
"interesting picture...might be worth taking a LT bearish position on GLD soon here..."
ReplyDeleteThat would be suicide, TOF. The key reason that is driving up gold (with everything around it being noise) is large government deficits (more than 10% of GDP), with the most optimistic dudes at CBO projecting those deficits to be even higher in 10 years. Gold MUST keep going up every year in this environment, and shorting it for LT would be suicide...
Hope Obama thinks about jobs when the $7 billion Keystone XL Pipeline crosses his desk Those are construction jobs that can't go to China, in an environmentally approved project. Sure, it's not solar, but it will actually make a significant contribution to energy demands. And then the refining of 700,000 barrels a day of Crude could be done in the Gulf Coast region instead of being shipped offshore for processing elsewhere.
ReplyDeleteLooks like TLT has made a top for the day and is about to break down through its intraday support. So I just bought 5 contracts of October $115 puts on it at $6.
ReplyDeleteAdded a couple more SPY $119 Sept 30 puts...avg is $3.65. Keeping position size small as the rally looks convincing.
ReplyDeleteAdded 3 more October $115 puts at $5.90.
ReplyDeleteTLT just made a bounce off its triple bottom level at $111.80 but it looks like it cannot lift off, and since we already know that there are no quadruple bottoms, a sharp drop in TLT might happen soon.
ReplyDeleteDavid- I'm telling you guys, it ain't going back down this time!
ReplyDeleteOh sorry, I thought you were short SPY also.
ReplyDeleteI agree with the TLT puts.
ReplyDeleteWow...very impressive rally over the past 2 days. If we can clear 1,200 on the close and gap higher then 2nd I will close my 35% short position and go long...
ReplyDeleteOverall, I am very impressed with this market. With an imminent Greek default and all those economic problems in US, S&P just doesn't want to go down. It had a perfect chance to at least retest 1120 early this week, but it didn't, and made a higher low instead! I suppose everyone has learned that tax cuts and stimulus can be a very powerful force for the stock market -- let's just make sure that Obama doesn't say something silly tomorrow.
ReplyDeleteAll right, TLT is finally heading toward its intraday triple bottom level. Watch it collapse now below that level, as there are no quadruple bottoms...
ReplyDeleteIt should reach $111.50 in a flash and then make a small bounce.
ReplyDelete2nd/David - let's give it more than a couple of days huh? i mean seriously we have been through what 3 of these rallies now? we have been through how many speeches on jobs creation packages?
ReplyDeletedo you really think we're not gonna get more bad news out of Italy / Spain / etc? Italy has to roll over around €45 billion in principal and interest maturing in September, a further €18 billion in October, and €35 billion in November. then they have even bigger rollovers in February and March of over €100bn. Spain has around €27 billion maturing in October and further €18 billion through November and December.
as far as I'm concerned it's nothing more than a trading rally. it's nice and feels convincing but until we get real concrete evidence of things improving in europe, i'm not convinced to commit more than 30 or 40% to anything more than a trade, long or short.
TLT is at $111.50 now -- it was SO predictable...
ReplyDeleteWe'll close above 1200 today, and gap higher tomorrow.
ReplyDeleteIs that enough?
We may even have a +400 point day on the DJIA.
ReplyDeletei suspect we will have another 6 months of this trading range just in looking at those maturity dates on Italy/Spanish debt. and 6 more months of talk of eurobonds, jobs creation packages, further debt downgrandes....
ReplyDeletefun stuff.
2nd - there you go jynxing yourself again...
ReplyDeleteNo, it's more like pressing the 6 and 8.
ReplyDelete10pts. more than I thought today. Man, every chart I just looked at is an Fing mess. Probably better to just stand aside here.
ReplyDeleteIs that craps? I still don't understand the rules to that game.
ReplyDeleteMark - RAS is building a nice base at the 3.3ish area....
"i suspect we will have another 6 months of this trading range just in looking at those maturity dates on Italy/Spanish debt. and 6 more months of talk of eurobonds, jobs creation packages, further debt downgrandes....
ReplyDeletefun stuff."
Man, that's exactly how I see it....Fun stuff indeed.
CP- Those were interesting quotes. Check them out if you didn't see them guys.
ReplyDeletelook the fact of the matter is BCPC is underperforming the market...and since it's a leading stock this rally is not for real. ok 2nd?
ReplyDeleteI believe we will get a small gap down tomorrow, which will most likely be filled.
ReplyDeleteAt least that's what the Gapguy told me.
If a freaking fracking company has been a leading stock, then BCPC underperforming is an EZPZ signal investors are moving on to real leaders- like large cap blue chips.
ReplyDeleteFolks, check out what the SF Fed President said today at http://www.frbsf.org/news/speeches/2011/john-williams-0907.html. Here are some excerpts that support 2nd_ave's optimism and give a further justification to today's rally:
ReplyDelete"The recent slowdown was due in part to temporary factors. The weather was unusually bad in many parts of the country this past winter, the Japanese earthquake disrupted global supply chains, and, perhaps most importantly for U.S. economic growth, oil and other commodity prices surged. Higher prices at the pump staggered Americans and took a sizable bite out of consumer spending at a particularly sensitive moment for the economy.
Recent developments raise questions about the strength and durability of the recovery. Still, despite all the obstacles, the odds are that we will continue along the path of recovery and that the pace of growth will pick up modestly. The temporary shocks that I mentioned earlier have begun to fade. Manufacturing—automobile production in particular—is starting to recover from the effects of the Japanese earthquake. Oil prices have come down. Importantly, the financial system’s health has improved greatly over the past few years. Interest rates are at historic lows and corporations are flush with cash. Banks are slowly relaxing their grip on loans. These factors should lay the foundation for gradual economic improvement. My forecast calls for the economy to grow around 2 percent in the second half of 2011 and gain further strength next year. Unfortunately, that won’t be anywhere near fast enough to bring down the jobless rate much. I expect unemployment to remain around 9 percent through the end of this year and to still be above 8½ percent at the end of next year."
More importantly, check out what he said about the Fed policy:
ReplyDelete"Like the hospital patient, the economy took a turn for the worse and faces heightened risks. In addition, inflation is expected to drift down. These circumstances called for additional monetary easing. At our August meeting, the FOMC took a step in that direction, issuing a statement that we are likely to keep the federal funds rate at exceptionally low levels at least through mid-2013. In one respect, this wasn’t such big news. Even before the announcement, financial market participants generally didn’t expect the Fed to raise rates much earlier than mid-2013. But it was news in the sense that it removed uncertainty and helped financial markets better understand our intentions. In response to the FOMC statement, financial market expectations of future interest rates and U.S. Treasury yields fell. Note also that we are not tying our hands by making this announcement. We haven’t made a guarantee. We will alter our policy as appropriate if circumstances change.
Right now, though, the real threat is an economy that is at risk of stalling and the prospect of many years of very high unemployment, with potentially long-run negative consequences for our economy. There are a number of potential steps the Fed could take to ease financial conditions further and move us closer to our mandated goals of maximum employment and price stability.3 Of course, these “treatments” won’t make our economic problems go away and their costs and benefits must be carefully balanced. But they could offer a measure of protection against further deterioration in the patient’s condition and perhaps help him get back on his feet. Thank you very much."
Pay attention to the words: "At our August meeting, the FOMC took a STEP in that direction..." and "There are a number of potential STEPS the Fed could take to ease financial conditions further and move us closer to our mandated goals of maximum employment and price stability."
So it looks like we ARE getting QE3 after all at the September FOMC meeting...
SSO/TNA - Seems like just jumping between these two could make you a nice gain...
ReplyDeleteDavid - I wonder if that's why oil has been running so hard...up 20% from the lows. I also wonder if they care at all about that...
ReplyDeleteRe the oil price - bad hurricane season so far has caused a lot of oil pumping to stop in the Gulf and this may continue. From my recollection, bad starts to hurricane seasons stay bad.
ReplyDeleteHedge Fund Managers are getting more bearish:
ReplyDeletehttp://www.insidermonkey.com/blog/2011/09/07/trimtabs-%E2%80%93-barclayhedge-survey-hedge-funds-getting-more-bearish/
That's potential good news as they will have to join the buying stampede (assuming we get one) into year-end and drive prices even higher.