Tuesday, October 25, 2011

10/25/11 Nobody even there to bluff



Today's sell-off felt more like a sentiment palate cleanser. The bears are done, bro- unable even to bluff the bulls.

We pop tomorrow.

90 comments:

  1. 2nd - this is my favorite song of all time. Thanks for posting it.


    REPOST:
    Kyle - mfg and bullshit? man, you gotta read up on the reporting requirements back in the day. it's insane. i can't remember which book i read it in, but i read some sample prospectuses that companies put out when they were going public and it was freaking ridiculous.

    "TOF- Watching the local news and they are doing a piece on NFLX. Interviewed a 30ish dude...

    "When they raised prices I realized I wasn't using it enough and decided to just use Redbox instead."

    Pretty funny. "

    I'm convinced analysts are and the market in general is missing the story at CSTR. Did you know that Hulu and Amazon don't even have the top 50 movies of the past 2 years and Amazon doesn't even have the top 50 TV shows of the past two years available for streaming? Any customers that Netflix is losing are going directly to Redbox.

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  2. Kyle,

    There are challenges in every investing environment - they just change. Perhaps you have also read "Reminiscences of a Stock Operator" (Edwin Lefevre) from 1923. You want to talk about a tough environment.

    For all the problems we have now, at least there is a SEC and quiet period and rules on insider trading.

    Plus from my personal experience, I don't think there is as nearly as much of the tweaking going on as people tend to portray.

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  3. This version doesn't hold a candle to the album version on Highway 61, though, IMO:

    http://www.youtube.com/watch?v=4cYJDcSfHSo&feature=results_video&playnext=1&list=PL5A510A131A951D3F

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  4. It goes without saying that this version of Tom Thumbs must be played at a high volume.

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  5. TOF - can you post the GLD chart you are looking at that makes you want to short? The weekly and monthly charts just look like nice uptrends to me.

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  6. NFLX - how much money was lost trying to short this stock over the last year? Markets are crazy.

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  7. Same goes with Highway 61 Revisited.

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  8. TOF- Wow...People laugh at ME for liking music from another generation!

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  9. BB,

    Good, there is strong disagreement. Yes, I've read that and Weldon's 'Tape Reading & Market Tactics', but the fact remains, from Vad, "you believe in objective fundamental value and one's ability to determine it. I don't." ... That's the Key element.

    It's a Markov process, sub- or super-Martingale thing...

    http://en.wikipedia.org/wiki/Markov_process

    http://en.wikipedia.org/wiki/Martingale_(probability_theory)#Submartingales_and_supermartingales

    Fundamental folks believe it's NOT a Markov Process, and Technical folks (like me) believe we can pick whether it's a sub- or super- and for how long....Night All

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  10. Kyle- You're the only guy I know who needs to include entire Wiki links with your comments in order for us to understand what you're saying ;_

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  11. As for me, I'm saying the market closes higher tomorrow. Let me know if there's any part of that statement any of you do not understand.

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  12. 2nd- And sometimes even that is not enough for me!

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  13. I have a Think Or Swim account and it was bought by T D Ameritrade so I'm starting to poke around Amertrade's platform over the last week. Maybe this is just a temporary promotional offer but they give you access to Minyanville's Buzz and Banter.

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  14. Last one BB!

    The new Nokia phone is killer! http://t.co/jIBstZCE $NOK

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  15. I heard a rumor that DB may be letting go of some peeps Just a rumor for now but all of us n the energy biz keep a watch for it. It could be just those involved in natty too. With low prices and not much volatility there isn't much to do. natty is one commodity that has not made it out of bear territory.

    The following article is over a month old but I knew a few peeps that got let go from Macquarie in Houston a couple of months ago. I wonder how many peeps have been let go?
    "Like most investment banks, Macquarie is highly leveraged to staff costs, and analysts have argued job cuts remain the bank's biggest shareholder value-accretion lever, given the weak revenue outlook."

    Read more: http://www.smh.com.au/business/job-cuts-loom-as-macquarie-fights-gloom-20110907-1jwz5.html#ixzz1bqpyWAYk

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  16. port- OK, but what's the angle?

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  17. DANG - I probably shouldn't ask, but is this thing cheap enough here?

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  18. Tuesday, October 25, 2011 - 18:33

    China Economic Data Calendar
    https://mninews.deutsche-boerse.com/content/china-economic-data-calendar-160

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  19. Mark, I don't know, crazy is more applicable for those who bought between $30~$15?

    I wasn't following this thing very closely at the time and I don't recall what the attraction was precisely, but has that attraction evaporated? The current price is considerably lower and seems to have "based", perhaps?

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  20. PAL - Man, this thing just keeps on creeping on up...

    I was really counting on another big sell off to put in a nice double bottom on some of these stocks I'd like to have...

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  21. Mark - no angle just thinking out loud that the bank commodity trading groups may not be doing so well. Again that may just be the natty side, everyone is struggling on the natty side.

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  22. Plan for tomorrow

    Nothing - just sit and watch. Would love to sell calls on T, JNPR, and FCX but not if we get another down day. I didn't expect to see today down so much and it would be just as possible to see it all made up tomorrow. If we go up and it sounds like we have some resolution out of Europe, I'll start selling some covered calls.

    One of my coworker's does a lot of golfing and some of his golfing buddies are pretty well off. He told me they all said they have some investments in MLP's. The one he mentioned was EPD which currently pays a 5.5% dividend. It's best to own units of an MLP outside a retirement account because most of the dividend will not be taxed. It just reduces your cost basis in the units and you pay most of your capital gains tax when you sell your units. I wonder if our next president will do away with that favorable tax treatment?

    later

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  23. OK port. Thanks. Maybe in the case of MF that's not such a bad thing!

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  24. a couple of things that make the bearish case iffy:

    oil
    copper

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  25. "As for me, I'm saying the market closes higher tomorrow. Let me know if there's any part of that statement any of you do not understand."

    The part I don't understand is "tomorrow." :)

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  26. Copper has indeed made a double bottom at $3.0X in early October and in late October, and is trading tonight above the highest point between those two bottoms -- a classical bullish case...

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  27. Judging by the action in S&P futures, I can say that the market will most likely *open* higher tomorrow. But as for closing higher, that's not so certain -- the European "leaders" can make some screwy statement mid-day and everything might collapse...

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  28. Let's hope that AUMN finally gaps up and goes parabolic tomorrow -- it's about time, with gold, silver, AND GDXJ surging higher...

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  29. Mark, your link did not work.

    I find the gold chart to be tough here. You can make the argument that we are at the bottom of the trendline going back to October, 2008, but the top we had in Aug/Sep was unlike anything we had in this period, so could be an exhaustion type top as it sucked in those last buyers chasing price. Plus, the gold chart relative to the other commodity charts shows a lot more downside to get back in line with traditional metrics.

    Copper back up over $3.50 this morning. Sure makes that drop to $3.00 look like the low for the current cycle.

    Oh, and one final thing. David, I would not use US Gold as a metric for valuing AUMN. US Gold has always had an exceptionally high valuation due to the McEwen factor. According to BMO, the average junior silver miner trades at $3.9 per rec. ounce.

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  30. F not behaving. It's TOF's fault.

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  31. These days you never really know. One poat by tof may be enough to drive lease prices down by 10% on all Fords. Little research has been done on the ripple effec of blog posts.

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  32. Just scanning the F 3's they seem pretty good. I guess it's the divy.

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  33. They must be getting ready to ---- things up across the Pond. Politicians- can't live with 'em, can't live without 'em.

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  34. FXE starting to have an impact...

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  35. CSTR - I found this website on the vending industry, there may be some interesting articles buried here somewhere on the business models of the various companies involved?

    http://www.vendingtimes.com/me2/default.asp

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  36. Hmmm - "Stocks rose Wednesday after Boeing, Corning and other U.S. companies reported stronger earnings and Germany approved an increase to Europe's financial rescue fund."

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  37. Wow, the dollar took off at 09:30...

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  38. Strange cross-currents. NDQ was down -38/DJIA +22, now NDQ -17/DJIA +39.

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  39. 'the dollar took off at 09:30... '

    Where's he headed, cp ;_

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  40. The Vending Times. Soon to become a must-read staple on this very blog.

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  41. Thanks for the link CP. I really like CSTR's solohealth investment. I think this could have some legs given the need to cut medical costs in this country.

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  42. So, I'm going to assume Japan was buying dollars, someone mentioned they expected Japan might intervene to weaken the yen today...

    But Yen doesn't seem terribly weak...

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  43. TOF - I've always liked CSTR's business model concerning the Redbox DVD rental.

    Kicking myself for not jumping in at $40ish...

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  44. "Where's he headed, cp ;_ "

    Off to meet his travel agent at the candy store? ;)

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  45. I like Rick Perry's flat tax idea.

    Personally, my idea for reducing health care costs is to subsidize alcohol consumption.

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  46. NCR - I wonder if NCR will see some business effects as a result of higher ATM fees?

    I'll probably be withdrawing cash from the bank ATM to avoid the new charges.

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  47. All right! TBT did gap up today as I had expected (yesterday's drop, especially the after hours one, was definitely overdone), and then it had its morning retest of yesterday's lows, which held. So now I can safely move up my stop on TBT a little (which I just did to $20.40), since if the whole market turns sour now (despite 2nd_ave's prediction of it closing higher) and TBT meaningfully drops below its support $20.50, I want to be out.

    I am off to work now (have a couple of meetings to which, unfortunately, I couldn't telecommute), and so I want that stop on TBT to guard my behind.

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  48. "I like Rick Perry's flat tax idea."

    I like the idea of a flat tax, but I don't like Rick Perry.

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  49. Folks, GDXJ made a new high this morning. AUMN is sure to follow. It is not to late to buy it yet, while it is still down...

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  50. Just bought 500 more shares of AUMN at $7.59 and raised my sell stop for the 2000 "trading" shares I have recently acquired to $7.15...

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  51. No worries, David. We've got your --- covered as far as TBT.

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  52. So Mark, I did buy into MET this am at $31.70.

    It's now up over 4%, so I probably should just take my profit and go, but in looking into this last night, I hadn't realized how they had improved their business and the stock had gotten so cheap (I usually just look at the smallcaps). Don't see any reason it couldn't get back to $45, where it was earlier this year. Would still only be P/B of 0.9 and P/E just over 8.

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  53. BB- Nice! I had to leave and couldn't baby sit it for the day.

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  54. Seriously looking at AMZN here.

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  55. SPX banging against the days range again.

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  56. Mark,

    not sure what you're looking to do with AMZN, but the smart, value girl on Fast Money last night said AMZN was still very overvalued and would have to increase earnings by 20+% a year for the next 10 years to grow into it's current valuation.

    Could be good for a bounce here, but I'm not good at picking those.

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  57. Regional Banks (KRE) up over 2% today, better than the market.

    That's a good sign as they have been beaten down and we need these to participate in the rally - moreso than the big banks as these reflect fundamentals whereas XLF has a lot of political risk.

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  58. BB- Yeah, just a bounce...But I'll pass unless the close gets really ugly for it.

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  59. Alright, I lied...100 AMZN @ 197.00

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  60. LNG was $3 during the panic. Over 10 today.

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  61. Okay, so now there is a eurozone plan?

    Today's meeting was canceled yesterday, now something's back on the table: On again/off again!

    Like taking a statue of the Empire State Building and driving it up your nose with a ballpeen hammer.

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  62. LNG - Hey, I don't really like the idea of exporting energy but it sure beats flaring it...

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  63. AMZN off @ 198.60. I'll take the family to dinner this weekend.

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  64. As crazy as it sounds, I think the market is acting more and more rationally. We still have a lot of times when everything goes up and down together, but it seems like the market is weeding through the good ones and the bad ones more and more. For example, look at the divergences between some of the momo stocks:

    LULU
    CMG
    NFLX
    OPEN
    CROX
    JVA
    MITK

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  65. CP- Yeah, it just fries my ass I don't have the balls to at least take a small stake at times like that. It's basically an open ended option.

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  66. Was thinking the same thing the other day TOF. But I'd leave MITK off that list. Crikes, it's only about 10% off it's all time high.

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  67. Mark > My list above is just an example of how much the high fliers have diverged...you have the ones that have gotten crushed like CROX, JVA, NFLX, and the ones that have done just fine like MITK, CMG, PNRA...

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  68. The market today created a very nice setup for a continued rally. This morning's sell-off dropped below what seemed to be a double bottom at S&P futures at 1222, thus running ALL the stops that there were, and then powered higher. I wouldn't be surprised to see S&P surge to a new post-October-4 high tomorrow (above 1254 on S&P futures).

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  69. I haven't been doing any short-term trading for a while (since I got burned on TLT puts), and this week I decided to use the extra funds I recently obtained from credit cards to open (on margin) some short-term trading positions: 15% of my port in TBT at around $20.7 and 10% of my port in AUMN at around $7.6. One of these positions is already working out (TBT), but the other one (AUMN) is still not moving anywhere (despite GDXJ making a convincing higher high today relative to October 4th low!).

    We know that hedge funds are using a simple StatArb strategy, going long companies that got left behind in a sector and going short companies that got ahead of the pack. Thus, given the very high correlation between AUMN and GDXJ over the past 6 months, AUMN can zoom up any day now if GDXJ keeps powering up.

    TBT made a higher low on October 18th and successfully retested it yesterday. So a higher high is very likely, suggesting that we will most likely see TBT above 22 this week. However, since my TBT+AUMN trading positions have almost completely exhausted my margin buying power, I will start taking some gains off the table soon, and so I just placed a sell limit order at $22 for 200 shares of TBT (out of the 1000 shares I have).

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  70. This trade may be doomed from the start. Bought FXE JAN puts. I saw resistance but then the big money may be seeing a "cup with a handle" and what the hey, port bot puts and we're going higher. The only reason I can see that would create a stronger euro is 1) there is a much bigger QE3 push coming up soon or 2) defaulting on debt actually makes a stronger currency. Anyway I have a plan and I'm sticking to it.


    http://www.screencast.com/t/Ssg81Yr2

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  71. Port- Do you ever look at VWAP? Might want to add that one.

    TOF- Yes Sir. I was obviously lazy looking at your list. It's crazy, I've never been to a CMG/PNRA and don't even know where one is. None here.

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  72. Looks like there was some direct insider sale of MITK 2 days ago. All for the same price and all in one transaction. Looking into it, but for the size/price, frankly, I think it's bullish.

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  73. $USD has just dropped below its support at $75.9, so tomorrow is likely to be another strong up day. Maybe AUMN will finally zoom up!

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  74. arggg, bad internet connection. later

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  75. We do realize, this will all be gone by tomorrow, right?

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  76. S&P futures are up 1.4% now -- something really bad needs to happen overnight in order to prevent an up day tomorrow...

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  77. S&P futures are up 1.6% now! If AUMN doesn't go up tomorrow... I'll stand on my ears!

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  78. The S&P futures are up 1.7% now! Let's not get carried away, all right? Even if the situation in Europe is resolved, we DO have a recession coming in 2012, so going to a new high on S&P doesn't make sense...

    On the other hand, short-term interest rates at 0% AND a pledge from the Fed to keep them that way until 2013 might make that recession quite shallow...

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  79. Here is an explanation for the overnight exuberrance in the markets:

    "German Chancellor Angela Merkel told lawmakers in Berlin that the goal was to bring Greece's debt down to 120 percent of economic output by 2020.

    There were concerns that that would require losses that the banks weren't willing to take on voluntarily. Having a voluntary deal is important because imposing losses on banks can trigger massive bond insurance payments that risk creating huge turmoil on global financial markets.

    A European official said early Thursday that a voluntary deal had been reached."

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  80. OK, the futures went down to +1.33% now -- that's more like it. :) All right, I am going to sleep now -- they better behave now!

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  81. Great looking morning - Europe getting better and the futures up huge. Oil up, copper up another $0.15 and gold down slightly (money being pulled for productive assets). The European banks are all up substantially and the broad European markets are up around 3%.

    Will be really key to see how the US market acts when it opens. Will this good news extend the uptrend from the last few weeks or will this be a sell the news type event?

    Good luck to everyone, especially you sleepy west-coasters who are missing all the fun!

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