Thursday, June 28, 2012
06/28/12 You can sleep at home tonight if you can get up and walk away
Does anyone even know what transpired at the bargaining table(s) across the pond today? Does anyone care? What I saw this morning was a series of ugly headlines, one after the other. An inauspicious start to the EU Summit, a $9 billion hit for JP Morgan, an unexpected win for healthcare reform. Guaranteed to crack the foundation of any bull. So I think a great deal of negativity has been cleared from the air for the time being. Enough to come down from the roof and venture safely into the streets.
Can anything good come out of Europe without Germany backing down? Sure. The kids could decide living by Mommy's rules beats being fending for themselves.
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HEK - Looking to break free of downtrend?
ReplyDeleteSo many companies are laying the blame for weak earnings outlooks on Europe that any positive news from the Summit could jack the indexes in a flash. Although a short squeeze would still be the primary driving force.
ReplyDeleteTLT - Has three unfilled gaps up since April.
ReplyDeleteCP - As the great gaps observer, what do you make of it?
I really don't put much faith in ETF gaps that actually trade in realtime, such as oil/gold/Treasuries, I think you've got to look at the underlying.
DeleteWell, I suppose you could extend that to SPY/QQQ, etc. as well and I had, previously, until it seemed like those gaps were actual targets. :O
Go figure, well... Let's say gold moves overnight, that could result in a gap for the GLD ETF depending on the circumstances even though the move may have in reality been contiguous. I still think the ETFs are poor instruments for T/A, so I look for confirmation in the underlying.
Most of the ticker's in my ETF portfolio are going down or sideways. IYH and IYZ seemed to have paused at the moment. UNG looks the best if it trades up.
ReplyDeleteI like LEN's chart even though XHB is slowly drifting down. I'd say LEN would be a buy above $30 but most everything I've read over the last couple of weeks about top down trading would suggest looking for shorts, not longs. That seems to be what Landry and CC are saying for now. Prices seem to drift down after every massive volume day for LEN though so maybe a pullback then another assault on resistance around $30 would do it.
As I type this I see the DOW popping on EU news and one guy did say the market will rally on any support for EU bank bonds. Guess it's an UP day and a monster close tomorrow. I hate that. I really wanted to retest the lows before we start goosing the market higher.
Two days ago i bought FSLR and sold the Jul 17 strike calls for a net cost of 14.62. I have a mental stop around $13.50 if FSLR starts dropping.
port > that's roughly my stop on FSLR as well. i'm about 95% sure that the bottom is in but i do have a mental stop in place. if my gut instinct is right then i think it's completely manipulated right now by the big boys as they square away their positions before letting it fly. there has been more good news out on the sector in the past 2 days with the much more lax cuts in tariffs than first feared in germany as well as FSLR breaking ground on their project in Alpine county, which is much faster than many people thought. there has been a good deal of positive news out in the past couple of weeks (stronger than expected european demand causing FSLR to not shut down German plant as quickly as expected, above two news, Japan increasing demand for solar, india increasing demand for solar, china increasing demand for solor) that will juice this sucker higher once the big boys are in and they let it fly. right now they're sucking shorts into it by walking it down and getting the weak longs to jump ship. i believe any day now we will see a 30% pop and then people will be jumping all over themselves to get long.
Deletei am probably going to keep my stop around just below last week's lows. it's a wide range but with this stock i think we need to keep in mind the huge potential reward...it's trading at 1/3 times book, they have a current ratio of 2.8 to 1, they're trading at 3.5 times estimate earnings, and there is a 45% short interest in the stock. all of these are a molotov cocktail for higher prices.
TOF - I know you're a big boy, but are you certain FSLR isn't a value trap kinda like RIMM?
DeleteCP - It absolutely could be. However, if you think it's a value trap then you think the entire solar sector is a value trap because FSLR is essentially the entire industry, the industry leader. RIMM, HPQ, NOK, etc are all has beens in their industry.
DeleteThis makes no sense. Why would the EUR/USD be up if the euro group is the one doing the printing and the bailing?
ReplyDeleteB/C it means the debt holders capital will be returned instead of defaulted?
Deleteseems odd that they can print more euro's and it goes up against the buck, unless of course there's a side agreement where bucks get printed too
DeleteNo default means the eurozone doesn't fly apart and Germany's exit of the currency? I'm guessing the Euro wouldn't perform well if Germany returned to their own currency, but that's really what Southern Europe needs, their own currency, IMO, or some centralized equalization mechanism such as the US has but even those can be questionable in terms of fairness b/c they can be abused to create debt bubbles. Take Sacramento for example, those debt owners should not be getting a bailout, they should be held responsible for their poor decisions.
DeleteNow perhaps if Sac can find new (reckless?) borrowers things can work out for the best but at some point and some how, the debt needs to brought to manageable levels.
David- It's Nadurra time! Or Miller. Who cares? Bottoms up, bro!!
ReplyDeleteMultiple meanings to the term 'bottoms up,' for all of us, tonight.
DeleteI'll drink my Nadurra when my July $5 calls on AUMN will hit my sell limit at $1.50.
Delete2nd, excellent move at the close
ReplyDeletei'll be dropping kids off during today's open so i'll miss that. Im wondering, even with a big gap up, seems like this will be a red day or a + dow 250 day. I'm thinking the latter which means its ok to buy at dow +150 for a trade. i may take a small position in SSO to ride over the weekend.
ReplyDeleteLong Weekend here in Canada - Monday the markets are closed and we are heading up north to a cottage this morning. Looks like I will miss the good opening, but that's OK, because I'm still fully invested.
ReplyDeleteI think a lot of this Euro-news is almost all just noise and we should keep our heads down and focus on the stocks with good fundamentals or charts. The Europeans aren't suicidal and will do what it takes to keep things moving forward, however slowly. And now we've got South Korea announcing a $7 billion stimulus to keep things going over there.
Everyone will do what they have to to at least keep things muddling through. Until we see some excesses building in the system which require either rates to rise or strong budget cuts or something or that sort, stocks will be the beneficiaries of these actions.
port- Another notch for the six-gun, I mean sixth sense. 82.5% long as of Thursday's close. Added AA @ 8.69, SLW @ 26.24, and EEM @ 38.35 early this morning. Now 97% long.
ReplyDeleteGap sellers doing their thing. So will Frau Nüsse scoff and the market shrivel?
ReplyDeleteSQNM - Injunction hearing today in SF at 09:30, this could make for an interesting day.
ReplyDeleteFSLR - This one should fly if Europe does decide to print.
ReplyDeletehttp://www.bloomberg.com/news/2012-06-29/japan-clean-energy-funding-to-double-as-incentives-start.html?cmpid=yhoo
ReplyDelete"The government initiative will require utilities to buy power from renewable energy providers at premium prices under so-called feed-in tariffs. As a result, investment in solar, wind and other forms of clean energy may jump to $17.1 billion from $8.6 billion in 2011, Bloomberg New Energy Finance estimates. "
I've noticed that states in the US are starting to require utilities to purchase from renewable energy providers now.
Guys this trading in FSLR is textbook set up for a MASSIVE short squeeze higher in the coming weeks. IMO they are f*cking with it just below the 50 DMA so that the big boys can get in and get fully loaded. Goldman and some other research house came out this week with a report that supplies will outstrip demand for the next several years. Yet there has been a significant amount of positive news over the past couple of weeks.
I believe we will see FSLR at $22 to $30 in the next couple of months.
You're probably right.
DeleteNot a whole heck of a lot of gas but at least it's a step in the right direction.
ReplyDeleteI think I'll puke if this market rolls over on Europe issues once again, the subject is so old and stale.
ReplyDeleteEWZ - Impressive! What wasn't so impressive was how it rolled over these past couple of days, casino style.
ReplyDeleteHow about GREK or EWP!
DeleteA lot of these charts sure look like H&S patterns, and I can certainly understand why they look that way... But if the market is going to leave the majority in the dust, this setup would be the perfect opportunity even though it's pretty obvious we're on the edge.
ReplyDeleteWow IYT
ReplyDelete"$LULU really starting to firm up here.. tight bottom. "
ReplyDeleteI'll say!
http://stocktwits.com/compliance/1751?href=http%3A%2F%2Fwww.schaeffersresearch.com%2Fcommentary%2Fcontent%2Fmarketobs%2Fshort%2Binterest%2Bmoves%2Bto%2Banother%2Bnew%2Bhigh%2Fobservations.aspx%3Fid%3D111716
ReplyDeleteI guess shorts are salivating at all the open gaps which formed so enthusiastically this morning.
ReplyDeleteHard to say how long those gaps remain open, I would certainly anticipate them to close at some point though, which means stocks will be sold back to those levels. Not if, but when.
IYT probably needs to retest $82 for example, but since it's an ETF I would want to examine the underlying for gap confirmation.
I don't think they're salivating, bro. They're gulping.
DeleteGood time to short gold here for a hedge, can't seem to make it over $1600 resistance.
ReplyDelete2nd_ave, I'll drink my Nadurra when my July $5 calls on AUMN will hit my sell limit at $1.50.
ReplyDeleteOn the other hand, last night I was carrying out a plan to invest the proceeds of my 401K loan into silver miners if SLV can rise above the December low. We've seen many times the movie of some security dropping below its previous low and then rising right back up the next day. Usually, that signals a false breakdown. As expected, I am having qualms about this decision, since I am already EXTREMELY long miners now, and instead of taking my gambling to another level and instead of paying off my credit cards with the 401K loan (which is what I intended to do initially) investing that loan into call options on miners, I am thinking I should probably sit tight and just wait for my July $5 calls on AUMN hit their sell limit at $1.50 so as to REDUCE my exposure to the miners...
ReplyDeleteWell, I just placed a buy limit order for 10 January 2013 $2.50 calls on AUMN at $2.10, mid-way between existing bid and ask.
ReplyDelete"We've seen many times the movie of some security dropping below its previous low and then rising right back up the next day. "
ReplyDeleteThe coals did just that. It's easy to forget that ANR was trading at $65 last year. I'm pretty sure that within a couple of years coal stocks will be all the rage again and selling ANR at $60 will be seen as the stupid thing to do.
I picked up another 100 shs of FSLR today at $14.9. I should have another $30k freeing up on Monday and if it stays down in this level then I will buy more FSLR. My stop out point is under last weeks low. A big drop from here but my average is around $14.7 so it would make it about a 9% loss whereas I think if this has bottomed then the upside could be multiples higher over the next several months.
ReplyDeleteSQNM - Riding the roller coaster today, vertigo setting in. Shorts are pissing on longs heads and telling us it's raining.
ReplyDeleteDay of injunction hearing is perfect time to plan short attack, SOB's probably think it's funny.
I have no idea of how the hearing is going, or went.
FTWR - Down $0.02(-15%)
ReplyDeleteSQNM - A green close puts this one back on the right track.
ReplyDeleteOffed QQQ @ 63.98 (opened yesterday at an average basis of 61.7x).
ReplyDeleteOffed BAC @ 8.09 (opened yesterday at an average basis of 7.6x).
Offed SLW @ 26.67 (opened this morning @ 26.24).
Offed EEM @ 38.93 (opened this morning @ 38.35).
Offed AA @ 8.73 (opened this morning @ 8.69).
Plan to exit OAKMX at the close (opened in the retirement account yesterday @ 44.83.
Looks like they're back to their old tricks with FSLR, tanking it on some analyst's suggestion that there is fraud at FSLR...on OpEx no less:
ReplyDeletehttp://video.cnbc.com/gallery/?video=3000099751&play=1
This is the same guy that said the following 4 weeks ago:
http://blogs.barrons.com/techtraderdaily/2012/05/30/fslr-axiom-sees-increased-risk-of-losing-u-s-projects/
"Johnson, who has a Sell rating on First Solar shares, and an $8 price target, notes that the L.A. county supervisor has said the company’s “AV Solar Ranch 1” is behind schedule because the project hadn’t received certain regulatory approvals, citing a report by Herman Trabish of Greentechmedia.com.
But he thinks there may be a 40% chance that the company could “lose” its large-scale projects, up from 10% before the recent regulatory snafu."
NOTE: AV Solar was approved for go ahead last Friday
Fraud - Sheesh, there's just no end to the streaming BS, is there?
DeleteHousing Affordability Index Reaches Record High
ReplyDeleteThe Housing Affordability Index rose to a record high of 205.9 in the first quarter of 2012, breaking the 200 mark for the first time since recordkeeping began in 1970.
According to NAR, a household earning the median family income of just under $61,000 could afford a home costing $325,500 in the first quarter. That's remarkable purchasing power when you consider that the median cost of an existing home nationwide is $158,100.
Currently, the median monthly mortgage principal and interest payment for a median-priced home would take only 13.5% of gross income.
Commenting on the report, NAR's president Moe Veissi said, "We've never seen better housing affordability conditions or market opportunities than we see at present."
Housing affordability is based on a combination of factors, including the median home price, median family income and the average mortgage interest rate. A composite Housing Affordability Index of 100 is defined as the point where a median-income family household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a down payment of 20% and 25% of gross income devoted to mortgage principal and interest payments.
Also, conditions for first-time homebuyers have never been better. A companion index measuring the ability of first-time homebuyers to purchase a home rose to a record high of 135.8 in the first quarter. The index is configured differently for first-time homebuyers: an income of 65% median ($39,632), a starter home of 85% median ($134,400), and a down payment of 10%.
According to NAR, first-time homebuyers could afford a home costing $182,500, an amount well above the overall median-price home.
For the year, the Housing Affordability Index is projected to set a record high average of 191. For more information about the favorable home-buying environment as well as record low interest rates, call today.
TGIF, is it possible the rally may last at least another session or two?
ReplyDeleteCould it be the start of another boring trend higher like in 2010 and 2011? Day after day of small gains on our way to 1,500?
Deletehttp://www.break.com/index/the-key-to-the-perfect-golf-swing-2340548
ReplyDelete2nd, excellent move, no cash flow at risk over the weekend, i like it
ReplyDeletebot 400 LEN at 30.02, using a breakout of a range bound stock,
I'm adapting Landry's sell half method though. Once I figure out how to do it on think or swim, I'll set up a sell order at 31.75 for half and a stop around 28.30.
I would have taken a bigger position but we're still a few days away before we know if this is a trending up market. For me, today just added more volatility but this gets me in and I'm defining my risk. If I were to write this down, I'd say take bigger positions when the whole market is trending in one direction, take smaller risk when I see individual setups in a choppy market.
Also bot 3 aug 90 strike NKE calls at $2.70. I was trying to sell some Jul 92.5 strike calls to reduce the cost but my order was about a nickle too hi. I'm left with a underwater position that I'll have to watch and try to get out of these with only a $500 loss if they go against me.