Thursday, August 2, 2012
8/2/12 Kind of a Drag/ Draghi
Kind of a drag when if you laugh you wanna cry
Kind of a drag when Draghi drags you down
Kind of a drag when your portfolio takes a -1.8% hit, which takes it back to levels not seen since that awesome one-day gain between June 28 and June 29. Henceforth, backpedaling on the heels of strong talk will be known as a 'Draghi.' ----ing A.
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----! Never underestimate the stupidity of those in power.
ReplyDeleteAfter hours bid/ask on KCG is 2.35/2.36> Mario's not the only dead guy/gal in the trading sector right now.
ReplyDeleteHa! Read the second paragraph of BC's morning commentary. I'm not the only dyslexic guy around.
ReplyDeleteJust like yesterday, my "complaint" about GDXJ being green despite SLV being red was addressed at the close of the day. :(
ReplyDeleteStill, if someone were to tell me that both Ben and Mario do nothing this week and as a result S&P drops 2% and SLV drops 3%, I would have guessed that GDXJ should be down 5-10%. The fact that it was only down 1% is really impressive. "What's important is not the news but the market reaction to the news!"
The fact that GDXJ was down yesterday and today on 1/2 the average volume (despite such potentially momentous events) suggests that there are REALLY no weak hands left in that sector.
DeleteDavid- Every dog has its day. Wait long enough, and no one will remember when both FXI and GDXJ were in the doghouse. Or when bonds were king of the hill.
ReplyDeleteYep. I just need to make sure that I don't get taken out on a margin call before that happens. :) Luckily, it looks like the downside in GDXJ (and hence AUMN) is very limited right now, and the May lows will hold.
DeleteTherein may lie the 'secret' to making serious money. Buy low. Forget about it. Sell years later when bell bottoms and granny glasses come back.
DeleteI'm holding the Summer 2012 version of trash, bro: FXI and EZU.
ReplyDeleteThat's one advantage of age> you can remember when the same freaking house bidding 500k with multiple offers attracted no buyers at 250k just a few years earlier.
DeleteNow that no one (including me) believes a sharp rally will commence on Friday, we may get one.
ReplyDeleteBetter lucky than good.
DeleteHere is an interesting analysis of the implications behind Draghi's announcement today:
ReplyDeletehttp://www.bloomberg.com/news/2012-08-02/ecb-politicians-anti-crisis-bargain-emerges-after-2-1-2-years.html
Here are some key quotes:
****
The European Central Bank sketched out its side of the deal yesterday, offering to buy Italy’s and Spain’s bonds on the market as long as the euro governments’ bailout fund makes purchases directly from the two countries’ treasuries and ties them to tough conditions.
At a press conference in Madrid two hours after Draghi’s announcement, Monti and Rajoy shrugged off questions whether they would ask for a primary market bond- purchasing program by the rescue funds.
“I don’t know if the Italian government will ask for activation of this instrument,” Monti said. Rajoy declined to answer the question.
One reason Draghi had to buy time is that European governments won’t be able to act until at least mid-September, the earliest possible startup date for the planned 500 billion- euro permanent rescue fund, the European Stability Mechanism. It faces a German supreme court ruling on Sept. 12.
Until then, Europe’s only rescue vehicle is the European Financial Stability Facility, with as little as 148 billion euros left over after last month’s approval of Spanish bank aid.
“Whatever the short-term gut reaction of markets, the ECB announcement constitutes serious progress,” said Holger Schmieding, chief economist at Berenberg Bank in London. “The chances have risen substantially that the worst of the current wave of euro crisis could soon be over.”
****
So we may attribute tomorrow's rally to the realization by the markets that some progress indeed HAS been made.
Some more analysis of today's events:
ReplyDeletehttp://www.businessweek.com/news/2012-08-02/gloves-off-in-draghi-weidmann-clash-over-bond-purchases
It's all BS. No hope for Greece and Spain to stay in the EZ (currency in the EU only.)
ReplyDeleteCME - This one's about to close the Feb 2nd gap up from ~$48...
ReplyDeleteSRS - Hey, what are the chances this one's ready to do some lifting?
ReplyDeleteUGA - Will this develop into a false breakout?
ReplyDeleteKGC - Hey, I wonder if these guys are gonna have to unwind their short positions?
ReplyDeleteJobs data in 7mins.
ReplyDelete/6E failed at 1.23. we get a bad number and the USD is going to rock higher, killing equities.
grab a cold one and hang on.
All clear signal for NOK has been issued:
ReplyDelete"Nokia Cut To Sell From Neutral By Goldman Sachs"
I'm not kidding.
This is the 2nd downgrade of NOK in the past 2 weeks by Goldman. They want in bad.
DeleteI still have about 20% cash. I would love to go all in on NOK but I'm finding the price of DMND too compelling. I will probably buy it today.
ReplyDeleteFrom David Einhorn's first quarter 2012 letter:
DeleteLast quarter, we noted that we had closed a brief and successful short position in Diamond Foods (DMND). Our thesis was that the company had engaged in significant accounting chicanery. When the stock fell by 66% a couple of months after the Partnerships established their position, we chose to cover and take a profit. We hadn’t changed our thinking about the accounting, but we were skeptical that anyone would do anything to actually curtail them is behavior. Imagine our surprise when DMND announced that its own audit committee had actually investigated, found the wrongdoing, restated earnings and dismissed the management. This sort of self-policing happens too infrequently and we think it deserves to be noticed and applauded.
Looks like the worst was already priced in.
ReplyDeleteLong DMND $16.7 avg.
ReplyDeleteInteresting comment about DMND. I do love those nuts!
ReplyDeleteFruits, nuts and flakes! ;)
DeleteSD Con call must not be going well.
ReplyDeleteFB is about to go negative for the day. not sure I will be able to hold this one, online gambling might not come in time to save the stock.
ReplyDeleteMET - She's a cookin' now!
ReplyDeleteMCP needs cash to stay afloat?
ReplyDeleteGot a link?
Deletecame across from TOS audio, he didn't reference a source so that's why I was asking here since I know you guys trade MCP from time to time.
DeleteGot it.
DeleteSQNM - Speaking of cooking, I guess you guys already know SQNM insiders finally broke down and bought some of their own.
ReplyDeleteI missed that yesterday. Dang.
DeleteKCG - Too funny! (Price action)
ReplyDeleteWPRT. Nice Q.
ReplyDeleteDMND - Not much volume(yet?), there may not be any sellers remaining, though.
ReplyDeleteCP - Yeah I noticed that too on DMND. I put an order in for 2k shares and it drove the price up $0.10. Not much interest in the name right now. That could change quickly.
DeleteMITK- Ugly reversal.
ReplyDeleteKCG - This limitation has been an issue in my trading account ever since KCG pulled their stunt:
ReplyDelete"Stop Limit and All-or-None orders cannot currently be accepted and any open orders have been cancelled."
God, dump those pigs!
DeleteYeah, they can't spell either, "canceled" is misspelled with two "l"'s
DeleteAdded more DMND at $16.5
ReplyDeleteKCG - Insiders should buy this thing to restore confidence...
ReplyDeleteMCP- I couldn't find anything re- cash.
ReplyDeleteGGB - Earnings seem upbeat, CNH has their sights set on Brazilian strength as well, specifically the Real.
ReplyDeleteTITN is a large US/Europe dealer for CNH's product line, not sure who their Brazilian dealer is.
Will Brazil crash? I don't know, but the US drought should create demand for Brazilian agricultural products. Fortunately for Europe, their rainfall has been sufficient from what I gather.
So is the housing market hosed or not, is this the big elephant in the room?
ReplyDeleteSVM - "Silvercorp Metals misses by $0.03, misses on revs"
ReplyDeleteAdjusted net income $8.1 million, or $0.05 per share (div is $0.025/q)
Adjusted net income was $17.5 million lower, compared to $25.6 million, or $0.15 per share in the quarter ended June 30, 2011 ("Q1 2012"), primarily due to lower sales, higher production costs and higher general and administrative ("G&A") expenses.
Okay, let me know when the media starts harping about how great the global economy is and we should all be getting long stocks. That should come right before the next 300pt selling spree.
ReplyDeleteGood Knight?
ReplyDeletehttp://www.nanex.net/aqck2/3522.html
Got NOK? This might explain some price action on the 1st.
Interesting. Not sure what to make of it. I did notice on the 1st that PIR was up substantially on no news whatesoever and I kept thinking that this was odd since they don't normally make that big of a move on days with no news.
DeleteWith NOK it looks like it could have had some impact but NOK was up huge in premarket/overnight on European trading. It probably added to the volatility of that day but I don't think it really had much of an impact on where the price was ultimately heading.
David - If you feel the urge to buy a China security, I'd recommend taking a look at ADY
ReplyDeleteWhy do you like it, TOF? All of its key statistics that I understand, such as (cash per share)/(share price), (debt/equity), Profit Margin, Operating Margin, Return on Assets, Return on Equity, and levered free cashflow are much worse than those of CAAS... I bought 1K shares of CAAS yesterday in my friend's account at $3.90 and added 500 more today at $3.70.
DeleteI think we should all applaud 2nd_ave's intuition for predicting a rally today.
ReplyDeleteThe news seem to continue the theme I picked up yesterday about Draghi's speech actually offering glimpses of hope:
"Investors took a second look at Thursday's statement by European Central Bank President Mario Draghi and concluded that help was on the way even though it would take more time than many hoped."
"A lot of market participants began to rethink yesterday's ECB statement and look at it from a more positive perspective. Overall, a lot of investors thought, 'maybe it's not as bad as it originally sounded,'" said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
Happy Birthday Jerry.
ReplyDeletehttp://soundcloud.com/rhinorecords/sets/grateful-dead-3-16-90-spring
Last summer, when I started borrowing money from credit cards (using 0% APR offers for 1 year) so as to buy cheap AUMN, I was fully expecting AUMN to rebound strongly by this summer and to pay off those cards before my promotional interest rate expires. However, AUMN dropped even lower over the course of this year, and I am facing the same re-financing crisis as the weaker European countries. Well, it is not as bad, since I have a WIFE with no debt, so far at least! :) So a month ago, I started opening credit cards in her name, and using 0% APR balance transfer offers for another year. Being a reckless person only to a certain point, I realized that I cannot keep investing this new money in the stock market, but instead I have to use it to pay off MY credit cards. So now, if AUMN doesn't shoot up in a year, I'll just transfer her balances back to MY cards in a year, and we'll keep transferring them back and forth at 0% (plus a nominal 3% transaction fee) until AUMN finally takes off. :)
ReplyDeleteA couple of weeks ago we received an offer for her from Discover Card, where they are ready to give her money at 0% *without any fees*! You get that, folks -- REALLY 0% money for a full year! Better than borrowing from the Fed! :))
I did that. My Costco amex gives me a discount starting at 1%. I bought some home improvement supplies and transferred it to my Chase card at 0% for 18 mos with a 1% transaction fee. Free is good. Even 1% is less than inflation which is still free.
DeleteIf you guys need any cash I'll lend but my rates are pretty onerous. Payment terms are pretty simple. Bruno comes to your door at 3pm sharp on Fridays and only accepts cash.
ReplyDeleteTried like a maniac to put in a VXX order today at 12.14 and no matter what -could'nt get it to fill...just kept saying pending. Started to get really pissed off. Then I realized the market was closed. Going on vacation tommorrow. All in all a good week. Only really bad trade was FB.
ReplyDeleteDMND - LOL, talk about flaky... Well this might not be so funny but here goes:
ReplyDeleteOkay, so right before leaving for the airport to pick up travelers, I placed a reasonable size bid on DMND @ $16.36 thinking it probably wouldn't get hit. I had considered placing the order @ $16.16 ....
Looking at the chart, it seems there was an exodus right at close and DMND retested the 52wk low of $16.15, thus filling my bid.
So TOF, here we go again.... ;)
Excellent purchase!
Deletenew post
ReplyDeleteEOG - Nice move...
ReplyDelete