Monday, October 31, 2011
11/01/11 A churning urn of burning funk
It's a pretty even call right now whether it's bulls or bears that get steamrolled tomorrow. There must be a ton of new bull converts who could easily be taken out with a massive gap down in the morning. However, there are even more demoralized bears with hopes resurrected by today's sell off.
Subscribe to:
Post Comments (Atom)
http://seekingalpha.com/article/303825-insolvency-looming-for-overstock-com?source=yahoo
ReplyDeleteInteresting take on OSTK, which is a big player in the online world...I honestly don't know how they maintain the prices they do. They sell a bunch of my suppliers products at what I think are below cost if you include the cost of shipping. I believe their biz model is to take a cut of the sales but I don't know how the sellers can make money on some larger products if they're offering free / minimal shipping charges.
I was at the library this afternoon with the little guy, and came across this in the 'New Books' section:
ReplyDeletehttp://www.amazon.com/Fire-Rain-Beatles-Garfunkel-Taylor/product-reviews/0306818507/ref=sr_1_1_cm_cr_acr_txt?ie=UTF8&showViewpoints=1
Will be next on my reading list.
any of you guys follow SILC? I've been trying to dig up info on the whole internet traffic trends driving growth in network appliances and what not. i know CSCO is a major beneficiary of this trend but i'm trying to look downstream. SILC looks dirt cheap and has had some pretty impressive growth of late.
ReplyDeleteAnyone else worried about the Greek referendum and how it will affect the markets with constant negative news for the next few weeks?
ReplyDeleteI just see that as being something to drag on the market until it is resolved.
Hope it gets killed quick.
BB - with cash on hand now I welcome a repeat of Greek related selloff...It's clear to me that it will take a helluva lot more to kill the world economy. My take on the longer term picture for earnings is that investors might just be in the sweet spot for the next several years. Some basic quick facts that will continue to support the markets:
ReplyDelete(1) Excessive pessimism because too many people/investors/traders are fighting the last war and are worried that the economy is going into a tailspin
(2) Companies refuse to hire rapidly for fear of economic collapse so they horde cash and invest in technology to make them more efficient
(3) Housing and jobs markets have much less downside risk than going into 2008/9 so they will not have as much of a drag than people fear
As a result over the next year or two I think we might have another bout or two of a fear based selloff that is accompanied by nothing more than a very mild and temporary recession. Each will present great buying opportunities for people willing to take risk and confident that companies will continue to weather the current climate perfectly.
I think the result is that if you're patient and willing to wait for panic to come into the market you will easily be able to get 50%+ annual returns.
"Anyone else worried about the Greek referendum and how it will affect the markets with constant negative news for the next few weeks?"
ReplyDeleteI'm anticipating all of the open gaps up will be closed, S&P back to the 50SMA. Rinse, repeat, rinse, repeat...
Cain has revised his tax proposal to 6969?
ReplyDeleteTOF - you keep wanting to short gold and I'm curious if you know why you want to short it so bad. Is it the charts (see attached) or maybe sentiment? I certainly believe some folks have an intuitive sense about things. I just know I'm not one of them.
ReplyDeleteI also ask because in truth, I don't get gold at all. Oil makes a lot more sense to me but gold keeps going up, it's been talked about for centuries, and it doesn't do squat but sit there and "hold value". So I'm bullish gold now.
The attached chart shows gold on top and the SPY futures on the bottom. They Y scales are not spaced the same so I added the vertical and horizontal lines for reference only. They are not intended to represent any sort of support or resistance.
http://www.screencast.com/t/YqVSuwNce
Another successful Halloween behind us.
6969...OK, that's almost as good as the crap on Twits!
ReplyDeleteIf you like gold, or maybe even if you don't like gold, perhaps you'll like TAXI?
ReplyDeleteimplied vol on CSTR puts are in the 50's for Nov expiry, that's juicy.
ReplyDeleteThe Nov 45 strike put is 1.25 / 1.35. That's a 2.86% return in one month if it doesn't get put to you. It's also breakeven down to a 8.36% drop from today's closing price.
Something to think about.
port > i'm basing it just on what looks to me like a mini blowoff top that is struggling to get back on track in the shorter term. Over the past several years there has been a 25% or so correction in gold every year or two. i suspect we get one here given the excessive bullish blowoff top.
ReplyDeletei think i'll pass here just bc i don't get the trade. to me assigning a value to a metal that sits in the ground and produces absolutely nothing of value any more than paper currency manufactured from a tree is kinda silly, but it is what it is.
I just put a ruler to the continuous S&P futures chart (sampled at 30 min) since 10/17 and saw that only NOW, with S&P futures at $1238, did the current pullback reached the upward sloping line that connects the two previous low: $1192 on 10/20 and $1216 on 10/26. So the pullback all the way down to 1238 still fits perfectly well with the newly established uptrend...
ReplyDeleteSo buy timber or timber companies. Timber holds value and GROWS while you wait. Food is good, holds value, is a vital commodity and trends with inflation. Gold is interesting *because* it isn't used or consumed for anything, which makes it quite different than oil (at least for now), but the rest of the world and central banks still think of gold as currency, which besides jewelry gives it value.
ReplyDeleteFor some cultures gold is almost a religious symbol. We Westerners don't 'get it' because we think everything is inanimate, but many cultures think of 'stuff' differently than we do.
I once flew behind a family from India with a couple of kids. The parents and the kids had a lot of very nice, simple but substantial gold bracelets and ear rings. They believe it brings luck and wealth, like certain rituals bring good crops in some cultures and prayers are answered for some here.
Let's put it another way. If I go diving and find a shipwreck full of gold pirate booty, I'm going to think that's a very good thing.
As long as there are people thinking the same thing then precious metals will have value.
Without that we might not be here! Columbus thought there were streets paved with the stuff and a lot of people died trying to find it.
Heck, California (The Golden State), especially for all you guys in the Bay Area wouldn't be what it is today if it weren't for Sutter.
Jeez man get a load of this Tim Knight guy:
ReplyDeletehttp://slopeofhope.com/2011/10/turd-sandwich.html
Talk about one cynical SOB.
MF - '700 million in client funds missing' -> Corzine is headed to jail
ReplyDeleteAlright. Looks like it's bulls that get steamrolled.
ReplyDeleteGold and silver - Brandt swung back to the bear side:
ReplyDeletehttp://peterlbrandt.com/
SVM - Well, there's an open gap up from $8.31 that needs to close, we're getting close to earnings day so this should get interesting...
ReplyDeleteOr maybe CSTR will move back to $40?
TTM - I really like how this chart lifted, so maybe I'll keep an eye on an opening there around or under, $17...
QE3 by Thursday?????
ReplyDeleteSeems to be some panic in the air this morning - might be overdone to the downside.
ReplyDeleteThink people are just getting fed up with the market as it feel like every day, someone in Europe does something.
Meanwhile, earnings just keep chugging along, but now that we are past the bulk of these, you won't have the daily good news to offset this.
QE3 - Is a GDP of 2.5 really bad enough to justify QE3?
ReplyDeleteI'd guess something get resolved in Europe first before we receive our next gloomy GDP report and things start going down hill leading eventually to QE3? Will the FED participate in a Europe rescue?
OWS will shut down any and all rescue operations?
GMO - That gap up is now closed, might get a chance at $2.50?
ReplyDeleteClosed my CSTR @ 47.12 at the open. Taking the $5K hit.
ReplyDeleteQE3 is more likely to happen as a result of some bank stress or "investment" firm contagion like we are seeing with MF. you know, the "we must save the system from itself" excuse.
ReplyDeleteMerkozy should just tow Greece's car and get it over with. Then they can accept free Gyro's, olives, lamb and feta cheese for the rest.
ReplyDeleteThat pine wine stuff sucks. Aside from the crappy wine this post is making me hungry.
cc - agree. The concept that 401k's are more tied to Greece/Italy than ANYTHING earnings related is going to really sink-in w/ the EOY statements (if this keeps up) and people are going to react (by hitting the eject button)...
ReplyDeletePine wine? You must be referring to turpentine, I wouldn't recommend drinking that!
ReplyDeleteIf I were greece, I'd send those greedy bundesbankers a truckload of jingle mail along with an FU note.
ReplyDeleteFound the discussion on Greece at the Telegraph - looks like bankruptcy would be just part of the plan for Greece:
ReplyDeleteBut the most important problem is the failure to study history. Here the facts are devastating, and bear repetition. Portugal has defaulted on its national debt five times since 1800, Greece five times, Spain no less than seven times (and 13 times in all since 1500).
By contrast, Anglo-Saxon countries rarely, if ever, default. In this country (the UK), we haven’t reneged on our debts in nearly 1,000 years, though there have been close shaves. The same applies to Canada, Australia and the United States.
Many European countries are culturally attuned to bankruptcy. Indeed, Greece has spent approximately half of the 182 years since it achieved independence from the Ottoman Empire in a state of default and therefore denied access to international capital markets – a position it is likely to resume in the very near future.
HES - The gap up from 60.59 is now closed.
ReplyDeleteS&P - We've still got some downside coming if we're going to fill the October gap up over the 50SMA...
ReplyDeleteCP, One of the stories is Greeks (apparently because they don't pay their bills) were accustomed to getting raided and plundered. Since they valued their wine (or at least the effects of drinking wine) and they didn't want it plundered, they would "flavor" it with pine which the invaders found horrible tasting, so they left the crappy wine. Me too.
ReplyDeleteThe other story is it was because they shipped wine in pine casks and even added the pine tar to the wine and the whiff of pine was a sign the wine was preserved.
The wine is called Retsina and frankly, it tastes like crap, which I think lends creedence to the first story. The Greeks seem to think it's a great idea, but we have seen lately that what they think is iffy at best. They were just lucky in the environment/real estate lottery.
Wonder if the Germans will wind up firing up their panthers for a cruise though the European countryside and back down into Brussels?
ReplyDeleteWhile it's true Greece borrowed the money, wasn't it the responsibility of the lenders to ensure Greece was capable of repaying, or have we simply reached a point in history where socializing losses and privatizing gains has become completely acceptable?
"The wine is called Retsina and frankly, it tastes like crap"
ReplyDeleteHa, seems like we've got something in common with Greece. We're told Asia doesn't import American products b/c we don't make anything they want or need.
Shoot. Could have gotten a better price on CSTR. I have no doubt though I can get back in a better prices. I agree with CP re the 50 dma.
ReplyDeletebot more cvv this am at 16.05 long 8800 shs at 15:85 avg. they have earnings on 11/10
ReplyDeletecan someone pls expplain wtf was up witth redf/sify yesterday?
ReplyDeletePine wine. A topic worthy of discussion on this blog. We don't recommend it if one values his/her eyesight.
ReplyDeletehttp://216.105.249.164/Mobile/news?id=436968224
ReplyDeletelooks like nls is out with a new pproduct...I'm really liking the prospects of this company. they sold off all crappy $ losing divisions, brought in new mgmt, have a solid balance sheet, got new consuming financing in place and are launching more products focused on new trends in fitness. they also have abouut $80 million in tax losses they can carry forward. i think this is a llow risk chance at making huge returns over time
FYI...
ReplyDeletegrassosteve Steve Grasso
backed off right at the first bounce level 1233 if u are charting daily S&P cash
intraday violation of 1221 makes me think we test couple lower levels again
MDW - Right on the bottom trend line here, would be a good play if global governments commit to printing the debt away instead of forcing banksters to swallow the pine wine.
ReplyDeletePM's - Now we know why the banksters increased their PM short positions (according to recent COT report) by 20% last week, they knew that Europe was far from done with their shenanigans.
ReplyDeleteNow SVM has a gap down to fill from $9.28, and a gap up to fill from $8.31, the only question is which fills first, I hope it's the $8.31 gap, which would allow me to reload in the low $8's or high $7's, the position I sold a couple weeks ago.
Watch out below if GLD happens to fall under the 144SMA at $158
Going against my better judgment: Long GLL (double short Gold) at $17.18.
ReplyDeleteRegarding gold, here is basically what I'm thinking:
ReplyDeleteOn the weekly chart the RSI got so high in August and immediately reversed that it most likely trapped a bunch of people that bought on that breakout. I think that adds significant overhead resistance. The highs from two days ago tried to break through the gap lower after that August push but the price quickly reversed. I still think the trapped longs from August are creating significant selling pressure on the price of gold. If you look at the volume on GLD there was a massive spike in volume on the weekly and monthly chart right around those August highs, which also coincides with trapped longs buying the breakout. I think there was a significant amount of damage at least in the short/intermediate term to the bullish trend so here seems like a logical point to short for a trade. There was a throwback rally that stopped short of the gap down, and enough of a sign that perhaps a new downtrend has emerged. And the risk is probably 3% upside versus up to 15% downside (target around $140 GLD)
SSRI - Nice gap down, if silver doesn't fall off a cliff back to $20 like one view of the chart suggests (The two targets are: $20 or $59), you can bet this gap fills...
ReplyDeleteBut look at these charts and you'll see these silver miners were trading above these levels when silver was $20.
For GLL I think the risk/reward is 6% downside vs 25 to 30% upside. I good risk/reward ratio for me.
ReplyDeleteLooks like I was wrong about the few higher lows on S&P implying a continuation of an uptrend (the futures just broke below the low on 10/26) and it looks like 2nd_ave avoided a major massacre by getting out of stock on Friday. Great call!
ReplyDeleteAs a consolation price, the sell limit for one January $50 DB put I purchased last Thursday at $6.20 was hit this morning at $13.50. Should have bought more such puts... :)
Also, the buy limit order for 10 AUMN April 2012 calls was hit this morning at $2.55.
I'll buy only options now, so as not to erode my buying power too quickly and get another margin call (my buying power is eroding fast as we speak, as the value of my port relative to my margin debt is going down).
Just purchased 2 TLT January $120 puts for $6.40 each. Can't afford to spend any more money on TBT...
TOF, thanks for the info on NLS. Took a quick look and it looks like a potential good turn-around stock.
ReplyDeleteReasonable balance sheet. Business seems to be turning nicely, getting some profitable stocks. Q2 was weak, but is their worst quarter.
This is one of the types of stocks I like to buy. I've got to do some more research, but my biggest concern is their growth plans are based on the treadclimber and the reviews on-line are not great. I'm concerned it could just be a fad as opposed to a longterm growth engine.
Following the Greek crisis on:
ReplyDeletehttp://www.telegraph.co.uk/finance/financialcrisis/8846201/Debt-crisis-live.html
and
http://www.athensnews.gr/portal/8/49905
Nothing on the Athens site for a couple of hours, couldn't figure out why until:
6.45pm Sorry for the silence, but we had some technical problems our end.
Freaken Greece, can't even keep a web site up to report their own problems properly.
BB - Yeah I've read reviews of the Treadclimber too and they're all over the place. It's honestly hard to discern between legit posts and possible bad reviews from competitors. The trends in the business are FINALLY moving in the right direction, though, which is huge for a company that is so cheap and down so much. Any whiff of good news on the next quarter or two and you could see a massive move up.
ReplyDeleteI'm interested in the whole license thing because that could potentially add some nice high margin revenues for them.
ehh screw it i took my loss on GLL...i'm just gonna focus on these small caps.
ReplyDeleteThat's a pretty big bar. News?
ReplyDeleteAUMN is back into the green now! And GDXJ is still down 5.5%! So all that underperformance of GDXJ by AUMN last week was not totally wasted -- AUMN is catching up this week! So now I need for AUMN to keep outperforming GDXJ when GDXJ will be going UP!
ReplyDeleteGoogle is totally screwed up this morning -- they are showing TBT being down 11% right now. I almost had a heart attack when I woke up and saw it down 12%... Their chart for TBT still shows yesterday's data -- did someone simply not supply them data for TBT today? Shouldn't Google be able to find that data on the internet by itself? :)
ReplyDeleteFrom Seekingalpha re the jump - problem is, the link on WSj is something different and can't find iton the WSJ.
ReplyDeleteTuesday, November 1, 1:30 PM Papandreou's call for a referendum on the EU bailout is "basically dead," says a PASOK party official, as reported by a Greek journalist. Stocks and the euro shoot higher as Europe is fixed again!
Any of you fellas follow ATHN? Some very impressive and steady revenue and earnings growth. Could be a big company 5-10 years down the road. They do cloudbased stuff with healthcare.
ReplyDelete"athenahealth, Inc., a business services company, provides ongoing billing, clinical-related, and other related services to medical group practices primarily in the United States. It provides services through the athenaNet, a proprietary Internet-based practice management application. The company primarily offers athenaCollector, a revenue cycle management service that automates and manages billing-related functions for physician practices, and includes a practice management platform. The athenaCollector assists its physician clients with the handling of claims and billing processes to help manage reimbursement. The company also provides Anodyne Analytics, a business intelligence application, which provides physicians and practice managers with insight into practice performance. In addition, it offers athenaClinicals, an electronic health record service that automates and manages medical-record-management-related functions for physician practices, as well as assists medical groups with the handling of physician documentation, orders, and related inbound and outbound communications. Further, the company provides athenaCommunicator that allows practices to manage patient communication tasks electronically, including the use of automated reminder calls; the creation of a self-service patient portal for registration, appointment requests, bill payments, and general communication; automatic generation of emails to patients; and patient education tools. It sells its products through a direct sales force, as well as through channel partners. "
I think we are just seeing a normal pullback in the market after the huge rally we had. This is my last chance to sell my last DB put, and so I just sold at $8.50 the 1 DB January $45 put I purchased a few weeks ago at $8.10. If the market keeps going down, I'll take that as a gift and an opportunity to buy more TLT puts at better and better prices (and strikes), which is what I'll be doing. That's my plan.
ReplyDeleteDavid - I think you're completely right and now is the time to be back into the market. I'm looking for opportunities. I almost bought REDF earlier today and am kicking myself for not.
ReplyDeleteNotice that HAO, despite being down 6% now after a similar decline yesterday, is STILL above the first high it made in mid-October after bottoming out on October 4. With support from China (in the light of the end of their monetary tightening), the commodity plays should keep making higher lows and higher highs... Both the Chinese market and commodities bottomed in November/December 2008, ahead of S&P.
ReplyDeleteAUMN -- nice! A stock cannot be dog forever, right? Otherwise, it would create an "easy" arbitrage opportunity: go long GDXJ and short AUMN. Hedge funds make sure that no such opportunity exists for too long...
ReplyDeleteIf you think Europe is ready to fall apart now, think again -- DB is almost at $40 now, after being BELOW $30 in September. In early October, DB made a higher low relative to its September lows. If the European banking system is not falling apart now, then we are just having an orderly pullback.
ReplyDeleteMini daily H&S pattern just failed.
ReplyDeleteIN SPY.
ReplyDeleteGM/F...Yuck.
ReplyDeleteFOE - normally I don't look at this crap, but Earl on CC mentioned selling some puts and the chart indicates there may be an upturn in the works. Any opinions???
ReplyDeleteDavid- Someone should sue GOOG for the multiple more-than-almost heart attacks caused by posting incorrect data this morning. They can afford it.
ReplyDeleteFOE- Well, it's ATR is good :). Never heard of it. Let us know if you find something.
ReplyDeleteJAG?
ReplyDeleteMark - JAG...I'm in it just not enough!!!!
ReplyDeleteKyle- NICE!!!
ReplyDeleteKyle - Nothing on the income stmt/balance sheet suggests FOE should be bought:
ReplyDeletehttp://financials.morningstar.com/income-statement/is.html?t=FOE
if you guys want a microcap bank to invest in, check out BKJ.
FAZ/FAS - FAZ hammering against 44.50. Not sure if there will be a FAS trade towards EOD or not???
ReplyDeleteThis whippy trading is reminiscent of the fall of 2008...my take is it ends differently but who the hell knows.
ReplyDeleteCVV appears to be pretty strong today which is nice...a big whoosh down in the market into the close can finish that off, but it's nice to see it so strong.
ReplyDeleteGraphene appears to be getting more and more press each day.
tof - Thanks man for checking that out. FAS may be on the move here.
ReplyDeletetof- Can you explain what you mean by 'it ends differently?'
ReplyDeleteFAS - well, that didn't work...
ReplyDeleteHere's what did it....
ReplyDeleteImbeciles forever
Submitted by Vadym Graifer (2624 comments) on Tue, 11/01/2011 - 15:45 #98995
*(US) US LAWMAKERS PLANNING TO PROPOSE A FINANCIAL TRANSACTION TAX (TOBIN) RELATED TO STOCKS AND BONDS
- Senator Harkin (D-IA) and US Rep Defazio (D-OR) propose the tax
Just bought 2 TLT December $121 puts for $5.50...
ReplyDelete2nd - I think what should and hopefully will ultimately happen is they just flip the bird to Greece and use the money they planned on throwing at everything to backstop Italy/Spain and allow them to extend their maturities several years or more.
ReplyDeleteSo I think when that happens, it will certainly end differently than it did in the fall/winter of 08/09. If that happens (Greece gets the boot), I think our markets will stabilize and then rocket higher. Based on current earnings, the markets would be trading at 1,500 to 1,700 in years past. People have no faith in growth and why should they given the nonsense going on in Europe.
Gap up tomorrow? Why the hell not?
ReplyDeleteWell, the futures have already surged after close. :)
ReplyDeleteThe pattern of large oscillations in futures today in place after a steep drop over the past two days is the same pattern we saw in S&P in August-September after the early August drop. Such oscillations in place usually signal the end of the previous trend, and it was my cue in September for accumulating long positions.
ReplyDeleteYeah, I was thinking as we were closing that it was likely a good bet to buy some SPY's, but would have definitely a risky bet. There is so much news that will happen overnight.
ReplyDeleteDavid - I would pay more attention to the daily swings first...if we start ping ponging around the 1,220-1,250 levels then I would agree. Just because it did it intraday doesn't mean that much to me.
ReplyDeleteYou are right, TOF -- each pattern implies continuation on the same time scale. So today's intraday ping-pong suggests that futures can surge to 1250 overnight. And then possibly drop to a new low in the morning. :)
ReplyDeleteIn case TBT makes a spike up tomorrow while I am asleep, I just placed sell limit orders for 200 shares of TBT at $20.50 and $21.00. It may seem like I will be selling these TBT lots at exactly the price at which I purchased them, thus making no profit. But there WILL be profit made if these orders get hit, because I bought some TLT puts today! :)
ReplyDeleteGoogle confused me earlier this morning about the magnitude in HAO's drop today. HAO is down only 1.55% today. When HAO is outperforming S&P, it is time to load up on beaten up Chinese stocks and on miners...
ReplyDeletehttp://finance.yahoo.com/news/Greek-government-in-chaos-apf-380418142.html?x=0&sec=topStories&pos=main&asset=&ccode=
ReplyDelete"Sarkozy and German Chancellor Angela Merkel, who have been at the forefront of Europe's efforts to contain national debt, talked by phone and agreed to convene emergency talks Wednesday in Cannes, France. Papandreou will also attend."
Let's hope they talk some sense into that guy on Wednesday, issue a statement to calm down the market, and the market gaps on tomorrow.
Yep, taxes really aren't about roads or schools, they're all about getting a government job, "waiting it out" and getting a fat check for the remainder of your life.
ReplyDeletenew post
ReplyDelete