Thursday, June 21, 2012
06/21/12 Markets catch up to the 'news'
For weeks, investors in global markets seemed content to 'ignore' the implications of a recession in Europe + slower growth in China + signs of a struggling US recovery. Does today's sell-off against the backdrop of headlines proclaiming all of the above suggest that traders suddenly and collectively 'get' the news? Hell, no! It's just the same old same old> the Market driving prices against the flow of majority opinion. I suspect a buying opportunity awaits around the corner.
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tof- It was a toss-up whether to go (at least partly) long at the close. I opted to remain in cash.
ReplyDeleteNow that Moody's has cut ratings on 15 banks, it's reasonably safe to start buying them.
ReplyDeleteInteresting take on the 'Greek slap.'
ReplyDeletehttp://finance.yahoo.com/blogs/breakout/did-greek-slap-mark-turning-point-euro-crisis-162329109.html
Dude, the last few weeks was a retrace in the downtrend. The market always does this. It always does the obvious in the least obvious way that leaves the most people off balance and out of sync.
ReplyDeleteIf you were short you almost made more in one day than all of the last two weeks.
Yeah, I sure wish I'd bought TZA at last night's close. Even SH beat the living poop out of UUP...
ReplyDeleteMark, sounds like your busy but I would be interested in MOG's take on this. I think CHK is risky but I don't it's the short candidate that it once was.
ReplyDeletehttp://www.bloomberg.com/news/2012-06-21/chesapeake-appoints-dunham-chairman-stripping-mcclendon.html
Bizarre: Japan and India are now outperforming everyone else. It's gotta be a currency thing right? Or perhaps the bears have reached their limits in terms of valuations?
ReplyDeleteI went to Google Finance and didn't even realize I put together a sample portfolio back in 2007 (actually 5 years ago this July) of several stocks that at the time I considered to be great buys. I just looked at the holdings:
ReplyDeleteBIDU
NTES
CAKE
JOBS
SIGM
WFM
The portfolio is up 147% since then and that is after I started it literally right before the top of the market. Just goes to show buy and hold can work. That works out to a 19.82% annual return. Pretty cool.
I'm curious what 5 stocks you guys would pick if you had to pick them and stow them away for 5 years. I'm gonna think about which ones I would choose.
ReplyDeleteGood video and article...true if you think of it:
ReplyDeletehttp://blogs.marketwatch.com/cody/2012/06/15/the-eu-is-doomed-so-buy-facebook/
"Now that you’ve watched the video and heard Roger the financial consultant’s call to “sell everything immediately. Quickly.” I’ll point out that the date of publication of this video is actually July 13, 2010 — when the Nasdaq Composite Index (COMP) was at 2,249 … 25% less than today’s quote. Apple was at $250. F5 Networks Inc. (FFIV) was at $76.
You think I’m making this stuff up about why you always want to buy the markets every time they panic over the EU crisis? Here’s what I was writing for my subscribers back in July 2010, at the same time this very video, which again is totally accurate but totally irrelevant to the stock market (just like the still-ongoing EU crisis today is, see?) was being recorded:
Take the other side of headlines proclaiming “Dow Repeats Great Depression Pattern: Charts.” I’m saying RIGHT NOW that the market’s about to rip 10% higher from this 9,800 level this morning by summer end on its way to 12,000 by sometime in 2011.
12:32 p.m. July 7, 2010
The market did indeed rip 10% higher from that level to year’s end, and it did indeed get to 12,000 by 2011, despite those darn EU crises we’re supposed to be panicking about all the time around here!"
>>>>>>>>>>>>>>>>>>>>>>>
when we first started freaking out about Europe we were at what like 1,150? we're going through another panic phase and we're at 1,320?
I 'discovered' the Bill Cara blog (and met 2nd) in 2004. Bill was writing about how the market was going to reach a crisis and go down...he had a PT of 10,000 which ended up being quite high, but the market then was 13,000-14,000 as I recall. And the crisis started to unfold and then the crisis would be averted by the Fed for a while and then it would start go and again be 'stabilized' before continuing. Then hank Paulson was made Treasury Secretary and Bill said he was "parachuted in" to buoy the markets, which he did until 2007-2008 when the shit finally hit the fan at the closing months of the Bush admin, which of course was Paulson's job.
ReplyDeleteSo what is the point of this? That these crisis'are processes, they are purposely unfolded slowly otherwise the charade would be obvious to all and we would be in the streets over-throwing governments and killing bankers and politicians. The theft is very slow but purposeful.
so in a sense we can ignore the news in the short term but realize in the long run it's game on and the process will be purposely slow.
Agreed, the process is purposely slow. I'm most interested in which way it goes in a longer time horizon.
Deletehttp://www.bloomberg.com/news/2012-06-22/gross-warns-of-risk-assets-as-aberdeen-underweight-on-equities.html
ReplyDeleteFrom Cumberland Advisors:
ReplyDelete"The FOMC extended “Operation Twist” through the end of the year and committed to move another $267 billion of assets from its holdings of securities with maturities of 3 years or less into maturities of 6 years or more. This will reduce its portfolio of short-term securities by about 1/3 and increase its holdings of securities in the 6-years and older category to over $2 trillion, or about 75% of its total holdings of $2.6 trillion. Such a lengthening of the duration of its portfolio is indeed significant, especially when it comes to evaluating the implications of possible exit strategies that don’t simply allow for longer-term securities to mature and run off."
That's exactly what I was writing yesterday -- extension of Operation Twist at these already low rates virtually guarantees losses for the Fed on its portfolio and hence implies pure money creation. So I am quite surprised at the sell-off in gold/silver on Thursday.
Luckily, my sell stop limit order for JRCC was triggered at $3.42 on Thursday, so now I have a little more buying power than before to combat the next leg down (selling 30 contracts of MUX calls at its local top also helped by reducing my margin). Unfortunately, this sell-off greatly increased the chance of my 20 contracts of July $5 calls on AUMN simply expiring. Well, we have one month left for that -- let's see what happens...
Anyone want to comment on the chart for Spanish utility Iberdrola (IBDRY)?
ReplyDeleteProbably the cheapest major utility in the world because it is based in spain, but over half of this revenues are outside the country.
I think it has bottomed and own it.
Too bad they don't pay a divvy...weekly chart looks awesome.
DeleteFSLR baby!
ReplyDeleteTOF- Dude, you caught a break. Take it.
ReplyDeleteMan, we're good. Simultaneous posts about the same stock!
DeletePXP- Wow, again...Did I miss something?
ReplyDeleteTaking some FSLR off here.
ReplyDeletei thought you sold yesterday bro?
DeleteLooks like TOF can afford Starbucks for the foreseeable future. Glad I was playing along.
DeleteI've been buying on the dips and selling the strength. I was buying yesterday with you. I did retain part of my Landry strategy to hold half which was a little painful yesterday but my shorts made up for it. So I still had half and reloaded just above your buy yesterday. Congratulations!
DeleteBTW, I think this one is just starting. Just crossed the 50, hopefully that is support and we see a pullback to test.
DeleteCC - I'm not selling yet. I know it's hard not to but I agree the run is just starting.
DeleteTOF- Your looking at your future...Small flag holder dude.
ReplyDeleteMITK- New bag holders going WTF is happening!
ReplyDeleteMarky Mark > I don't think that MITK run is over, unfortunately.
DeletePXP - Wasn't this the one we were trading just before it was bought out? The chart sure doesn't look that way.
ReplyDeleteNo, that was BEXP.
DeleteThis comment has been removed by the author.
ReplyDeleteFreebie....
DeletePVA on a weekly chart.
FSLR is EXACTLY the reason why I've decided to ignore the macro bullshit. I learned my lesson with MITK which I blame Mark 100% for getting skittish on. Damn Keurig drinking hippie.
ReplyDeleteI thought we agreed to not mention the stock that shall not be mentioned, although he should be throttled soundly for drinking Keurig swill.
DeleteStarting small entry into PVA....
Hippie?? Look who's talking SFD. Man, I'm such a wuss I'm drinking caffeine fee diet coke.
DeleteOn the plus side, sheetrockers start Monday!
DeleteSo you must have got a handle on the kitchen....
DeleteMark - Are you doing the kitchen yourself or contracting everything out?
DeleteYeah. Man, getting my dick head subs to do anything actually for me is like pulling teeth. Ungrateful SFD's.
DeleteSFD? stupid f****** d****?
DeleteSingle Family Dwelling? Sir Francis Duke?
DeleteMITK - Whomever controls this one loves to bang the tape around.
ReplyDeleteTIE - I thought SAC Capital had a position in this one?
ReplyDeleteYes, apparently this is true.
DeleteAs the world turns: SEC said to be investigating SAC Capital:
http://www.bloomberg.com/news/2012-06-21/sec-said-to-depose-sac-s-cohen-in-insider-trading-probe.html
Adding FSLR.
ReplyDeleteFSLR - BOAML Currently rates this one a buy.
ReplyDeleteFSLR - Brief pullback to $15.50?
ReplyDeletePZZI - Look at this shit!
ReplyDeletei noticed that on the best gainers list yesterday
DeleteHave you guys decided which stocks you would hold for 5 years if you had to? I think DECK might make my list.
ReplyDeleteI think I'd want to mix cap gainers with dividends for a the long haul.
DeleteSo my div payers would have to pull back.
LINE
CNSL
CHSCP
FGP
These all pay great dividends and have the potential for good cap gains if you buy right.
SH - This one comes to mind right now.
DeleteIn looking at those on Morningstar's 5 year financials here are my quick thoughts:
DeleteLINE - 3 out of 5 years with net loss, revenue extremely jumpy (from $300 Million to 1.4 Billion down to $200 Million up to $1.6 Billion, negative free cash flow 4 out of 5 years)
CNSL - This one looks better > doubling FCF over past 5 years, but no revenue / operating income growth. Must be a utility?
CHSCP - Looks like an etf?
FGP - Looks similar to CNSL except they had net loss this past year.
MAybe an oil producer as well, I'm just not sure which one or if electric cars will catch on. Electric cars are still a possibility in my mind, from a technical perspective these could work if battery technology improves enough.
DeleteSo maybe AONE, assuming positive developments?
I thought you were going to ignore the macro noise?
DeleteLINE *if it pulls back* pays $2.90 div. Oil co. of course it losing $$$ oil is sucking and commodities are in a bear mkt. When do you buy, when price is up or down?
CNSL: Phone company, just took on some debt to purchase another phone co. Pays $1.5 on a $14.40 stock.
CHSCP: Cenex, an agricultural conglomerate. Ferts, seeds, insurance, fuel, processing, export/import, ethanol, etc. Multinational. Look at the chart for as long a period as you choose. Buy the dips, sell the rips, collect the $2.00 div.
FGP: Ferrelgas. Employee owned propane supplier. Propane is like NG but more subject to oil prices (liquid petroleum), so the base materials (oil) are at the lows yet the co keeps buying more suppliers and pays $2.00 on an 18.50 stock.
So I ask myself..."self, are phone profits and data feeds going higher or lower? Is oil going to stay low? Is food getting more or less plentiful and is the population growing or shrinking? Is everyone on a gas line or will populations grow and need more fuel? Are propane prices and the base material high or low?"
The rest of that stuff is noise and made up crap.
FSLR should be teaching you something. Are they making $$$? F no! Do they have the potential for making $$$? Yes. THAT is what we are buying. We are buying HOPE, which is an emotion. Well, that and over 8% dividends in a .5% world.
NLY - Back over $17
ReplyDeleteSFD...Small flag dude! You didn't see that guy holding the little fags from about 8 countries on the exchange floor for their IPO?? That's you future bro!
ReplyDeleteYeah, I'm doing almost all the kitchen myself. Too cheap, but it would cost the average sucker about $60K for what is going to cost me about $15K...Check this out, my sink faucet cost $3,750. I got it for $720!
$3750 - Obviously not solid gold, bro-hammy. $720 sounds like electro-plate?
Deleteholy s*** that's a good deal. so we're gonna export sink faucets in addition to the toilets?
DeleteSFD > Was that on CNBC? haven't turned that on all day thank god. i can only imagine...talking about Europe right? Steve Cortes is bearish. Joe Terranova is still stammering his speech. Steve Grasso is looking at levels. And Jon Najarian is pumping a buyout rumor on a stock he bought calls on.
I'm just wondering when Mark saw TOF's 'flag'? Sounds a little weird to me.
DeleteDMND - $18 now, when's this one gonna get going?
ReplyDeleteCall me crazy but REDF appears to be bottoming here (for the 30th time)
ReplyDeleteAdded some REDF at $3.63..average is now around $3.8
DeleteChart kinda looks like tweezer bottom, beginning to think you nailed this one.
DeleteRUPEE -Another new low against dollar today, a rather large move...
ReplyDelete$BSE - Phenomenal performance lately, I guess the low Rupee presented a unique opportunity to obtain a bargain?
DeleteI know man I don't get it. The low Rupee should be a bad thing for them but the market says otherwise.
DeleteMark - Kitchen Remodel: I've got a nice Salvadore Dali watercolor painting here I'll let you have at a good price, I think it would go well in the new kitchen....:
ReplyDeletehttp://en.wikipedia.org/wiki/Salvador_Dal%C3%AD
"FSLR should be teaching you something. Are they making $$$? F no! Do they have the potential for making $$$? Yes. THAT is what we are buying. We are buying HOPE, which is an emotion. Well, that and over 8% dividends in a .5% world."
ReplyDeleteCC - I agree as far as trading goes. But if I'm looking at an investment over the next 5 years that I have to hold, I'd prefer to have something with steady growth that doesn't have a history of big losses. For a rebound, shit I think FSLR has the biggest potential out of any to rebound. But I have no idea where it goes in 5 years. Having said that, look at the 5 year financials for FSLR...solid steady growth in revs and profits. Perhaps last year was just an aberration? A 90%+ drop should price that in.
Then the Cenex preferred shares would be ideal. On a weekly chart its flat to rising for ever, pulls back in planting season (it's an AG co-op so farmers use it to store $ over the winter) and pulls back after dividend dates. It generally pulls back to the previous div price and then slowly climbs back and then some, pays the div, pulls back to that last quarter price and builds again. Every once in awhile it pulls back to the base at $25 where I back up the wagon. Seamus at BC told me about this one in 2004 and it has been an awesome long term investment. I buy it on any weakness knowing it is steady as the chart shows.
DeleteCNSL was $13 in 2007-2008, went to $20 and pulled back to $13.66 on financing their latest acquisition. I bought in at 13.80 +/- and have traded it on fluctuations since while collecting the div which is over 10% with excellent possibilities for cap gains once the acquisition becomes profitable.
I have a friend that told me about FGP and it has a local outlet here. It just crossed the 50 dma up with a bowtie. I wish I was watching closer at $13.35 which was the 52 wk low.
I hold these in my long term accts for tax reasons. They pay good divs and tend to be stable and of course I use stops so once i'm up and getting paid I'm good. I trade for cap gains out of my margin acct.
I've been trading/investing/watching these since 2004 so I'm comfortable with their price action.
Remember the flash crash? I'd look forward to one of those. LINE was $12! That would be over a 20% dividend right now and a triple bagger cap gain.
DeleteIf we had some sort of crash or flash crash I would go all in on the stocks I listed, (and probably one of those triple bull ETF's for S&G's).
Did you get a chance to look at PVA on a weekly chart?
ReplyDeleteyeah man. i actually don't like the setup on PVA right now. It's definitely in a nice uptrend but the stochastics / macd are near the top end of the range.
DeleteI thought you were looking for one of those long basing patterns? LOL!
DeleteThe stoch and macd are the product/derivative of price, so if it is building out of a long bottoming base pattern it will be going up in price and the derivatives will indicate that.
Pull up a 2 yr PVA with RSI and a 2 yr FSLR with RSI. PVA actually has the better chart and base and a lower RSI. PVA is a Landry find so I can tell you it has a higher HV than the market. I'm in both.
I'd just prefer to see those two indicators crossing over from an oversold level. but doesn't mean it's a bad pick :) If it can hold the Feb highs then it could just be testing the breakout level here.
DeleteThis comment has been removed by the author.
Deleteooops, correction....
DeleteIt wouldn't surprise me to see a pretty healthy pullback in both FSLR and PVA. The RSI on the weekly (two years) is 92 (correct to 96) for FSLR and 82 for PVA so they both have had some good gains off their lows.
BUT, look at where they used to live. Both of these could be multiple baggers over the long haul.....if we have the guts to hang on in the downdrafts.
guts is key...however, i don't see the same RSI readings:
Deletehttp://stockcharts.com/h-sc/ui?s=FSLR&p=W&b=5&g=0&id=p58184545287
The shorter term charts which tend to exaggerate the RSI readings aren't even in overbought levels: RSI7 = 67
here's a 30 day for both.
Deletehttp://screencast.com/t/zX9KjERu
http://screencast.com/t/eCF87pOv
Here's two years on a weekly:
http://screencast.com/t/ACFivnfXppi
http://screencast.com/t/56bvPNNi06z
I see my period was slightly different for each. FSLR was 6 day smoothing and PVA was 7. so with a 7 day RSI for one month, FSLR is now 79.07.
DeleteWeekly two year still says it's over 92 (92.78). ?
weird i don't see those readings on any chart program i'm using.
DeleteThose programs don't have real time charts do they?
DeleteMy program is live real time. There could also be some difference in how they work.
Here is yesterday's close from the Cara RSI tool.
http://screencast.com/t/w2Tr5C0Q6a
Anyone watching USO? It's sneaking up....
ReplyDeletei am man. if it can get going it will only continue to fuel FSLR higher.
DeleteREDF right back down to its official POS status.
ReplyDeleteMarkets look like they want to close the day strong. Oil and copper trending higher all day.
Per UBS
ReplyDeleteHigher demand from China not surprising
May monthly solar polysilicon demand up 28% m/m; prices down slightly Our checks find total poly shipments into China in the month of May-12
rose dramatically to 7,900MT (metric tons) with blended poly prices (all contract and spot transactions) down 1% to $26/kg. We expect China’s poly
demand to remain high in 2H12 as we estimate Chinese solar of 5GW and higher demand in Germany as Feed-in-Tariff cuts are pushed out (we
estimate even 4GW in 1H12 and 2H12).
Poly demand from tier-1 customers up 56% m/m; tier 2 demand up 12% Our analysis shows China’s May-12 external poly demand was driven by
the tier-1 solar companies who purchased 3,500MT. Of that amount, our checks found Yingli and Suntech each purchased over 1,200MT of poly, their
highest amounts ever. External poly demand from the 40+ small tier-2 solar companies in China is still high at 4,400MT which also implies better solar
demand visibility in 2H12.
But, solar poly prices in China likely continue to decline near term Our analysis shows the US is still shipping the most poly to China in May-12 at
3,300MT (likely Hemlock and REC) and was up 29% m/m. Poly from Germany was up 60% to 2,100MT while Korea was up only 15% m/m at
1,700MT. Blended poly prices from the U.S. were $22/kg suggesting more price downside is possible near term as poly prices from Korea were $25/kg
and Germany was $35/kg.
Solar stocks likely range bound as near term poly prices trend lower We still estimate poly prices trend slightly lower to $20-25/kg until solar
demand in emerging markets, such as the Middle East and Southeast Asia reaches scale. We believe higher poly prices on higher demand would
signal a healthier industry.
Unbelievable...MITK is basing for another run it looks like.
ReplyDeleteAnother POS stock setting up: TZOO
ReplyDeleteNQ marky mark.
ReplyDeleteThis may explain some of today's price action.
ReplyDeletehttp://www.bloomberg.com/news/2012-06-22/gulf-of-mexico-storm-threat-sparks-rig-evacuations.html
Then again it could be the usual noise....
So now Pickens has a new plan?
ReplyDeletePass Me a Beer!
ReplyDeletehttp://www.youtube.com/watch?v=qec8hPzqHBk&feature=youtu.be
I have a beer, pass me a map!
ReplyDeletehttp://www.youtube.com/watch?feature=endscreen&NR=1&v=qQdhMSEqhfg
i love that clip. an oldie but goodie
DeleteSWC - Yea, a high volume day...
ReplyDeleteMUX - Mega volume and closed at high. Trap?
ReplyDelete