Wednesday, August 29, 2012

8/29/12 Market Drivers

If most global indexes are down substantially YTD (most notably the Shanghai Composite, which is back at levels last seen during the 2008 financial crisis), why are US markets at 4-year highs? I know as little as anyone else about the future, but common sense tells me (i) recession in Europe + (ii) what now appears to be a ‘hard landing’ for the Chinese economy (the world’s second largest) = (dramatically) lower profit margins for US companies (currently at multi-year highs) over the next few quarters. ‘Common sense’ can get turned on its head in the short-term, but should prevail longer term. Cash seems prudent.
Posted by at

71 comments:

  1. ChickenpookieAugust 29, 2012 at 1:05 PM

    My definition of a hard landing for China involves GDP growth of around 6% or less.

    I'm not sure what it currently is, but certainly is cause for concern.

    ReplyDelete
    Replies
    1. 2nd_aveAugust 29, 2012 at 3:46 PM

      My definition would have to be 'when market prices tell me it's a hard landing.' That's what prices are saying to me right now.

      Delete
  2. 2nd_aveAugust 29, 2012 at 3:51 PM

    Another round of QE? For crying out loud, are there no adults in charge? What America needs is some combination of motivation, education, and spending cuts.

    ReplyDelete
    Replies
    1. AnonymousAugust 29, 2012 at 4:38 PM

      i wouldn't worry about that 2nd. its out of our control. what's in our control is our ability to make profits in the markets. it has been trading sideways for two plus weeks. if we pull back it won't be until after we first move higher. you don't normally get a chance to sell the top for this much time. i still stand by my thinking that any pullback should be viewed as a buying opportunity and absolutely no shorts should be laid out.

      Delete
    2. ChickenpookieAugust 29, 2012 at 5:28 PM

      QE's a done deal now? With S&P over 1400, that's a surprise I wasn't anticipating!

      Delete
  3. Port2017August 29, 2012 at 8:01 PM

    didn't do much today, sold my 100 shares of CHUY, enough for a couple of lunches. I have a good tll cancel order to buy 300 shares at 17. I reaad something on seeking alpha today saying they think the stock is pricey, they may be right.

    my value investing coworker says he thinks we go a little lower on natty. He also said when he buys he will buy DVN and XCO. He thinks the drilling is about done - he believes producers can't spend any more money drilling at these lower prices. One production area that seems to be growing though is the Marcellus so that's the wild card. I think its still best to just watch the storage numbers.

    ReplyDelete
  4. Port2017August 29, 2012 at 8:14 PM

    NOK chart is very interesting. Look at Aug 2, 14, and today. It's a perfect pattern on Landry's 10 20 30. So they buy trigger would be 2.06, stop around 2.68. A $500 max loss would make that around 1300 shares.

    The only think I don't like are the bigger volumes on the down days.

    ReplyDelete
    Replies
    1. Port2017August 29, 2012 at 8:15 PM

      u guys know i kant type. The buy trigger is 3.06, a dime above today's high, not 2.06

      Delete
    2. AnonymousAugust 30, 2012 at 5:16 AM

      ignore the early august day...that was the day knight trading went bust...volume in NOK was astronomical.

      Delete
  5. AnonymousAugust 30, 2012 at 6:01 AM

    Great chart on Nat Gas storage...as you guys know the storage report is out at 10:30 EST (7:30 PST). Estimates are around a build of 61 to 70 bcf. For the past I believe 17 weeks there has been a build of less than the 5 year average. Two weeks ago it was significantly below the 5 year average but futures sold off. In fact the build over the past several weeks has been quite a bit below average. Either the market knows something or this selloff has been a technical one to shake out longs before moving higher. A print below 60 should be seen as bullish and one above 70 should be seen as bearish but who knows. Next week should show the effects of Isaac's shut ins.

    ReplyDelete
    Replies
    1. AnonymousAugust 30, 2012 at 6:02 AM

      http://americanoilman.homestead.com/GasStorage.html

      Delete
    2. AnonymousAugust 30, 2012 at 6:32 AM

      I honestly think today and tomorrow will be non events for natty. Then we could see a rally starting on Monday.

      Delete
    3. 2nd_aveAugust 30, 2012 at 6:44 AM

      Major cojones holding UGAZ going into NGas inventory numbers.

      Delete
    4. ChickenpookieAugust 30, 2012 at 7:01 AM

      I'm probably in if they sell it off...

      Delete
  6. KyleAugust 30, 2012 at 6:05 AM

    http://www.alsosprachanalyst.com/economy/an-unexpected-proponent-of-qe3.html

    Interesting article. China may need QE3 more than we do.

    ReplyDelete
    Replies
    1. AnonymousAugust 30, 2012 at 6:31 AM

      why do people care so much about this crap? when has this ever helped us with investing? seriously. what was the last time you got macro calls correct and made a ton of money off them? i'd rather focus on setups with individual stocks.

      Delete
    2. AnonymousAugust 30, 2012 at 6:31 AM

      sorry don't mean to sound harsh but that's my thinking. it's just a waste of time.

      Delete
    3. ChickenpookieAugust 30, 2012 at 7:04 AM

      A stronger dollar is an economic booster for China.

      Delete
    4. KyleAugust 30, 2012 at 7:14 AM

      "In other words, it is hoped that QE3 will push the dollar down and encourage capital flow into China, so that PBOC can expand its balance sheet by accumulating foreign assets, which is the old way of doing things, rather than having PBOC initiating the “dirty work” of quantitative easing by themselves."

      i.e., QEn stimulated their economy. Back then, they didn't need it, but now they do. As I understand it.

      Delete
  7. MarkWAugust 30, 2012 at 6:35 AM

    Rough open for NSPH.

    ReplyDelete
    Replies
    1. MarkWAugust 30, 2012 at 6:50 AM

      500K shares in 10 minutes. There's a lot of interest in this name now.

      Delete
    2. ChickenpookieAugust 30, 2012 at 6:59 AM

      Still have my bid in @ $3.01

      Delete
  8. ChickenpookieAugust 30, 2012 at 7:05 AM

    F - Is someone(s) accumulating this one in the low $9's?

    ReplyDelete
  9. JBmaderaAugust 30, 2012 at 7:14 AM

    morning guys. been experimenting with the Darvas Box study, on the daily chart, as my trigger for swing trades. just starting to collect some results.

    ReplyDelete
    Replies
    1. AnonymousAugust 30, 2012 at 7:17 AM

      whats darvas box?

      Delete
    2. KyleAugust 30, 2012 at 7:21 AM

      JB - was looking at an interesting article on Darvas Box yday ... may be of interest ...

      http://seekingalpha.com/article/835731-a-look-at-s-p-500-valuation-and-darvas-box-theory?source=kizur

      Delete
    3. MarkWAugust 30, 2012 at 7:23 AM

      Pandora's evil brother. Be very careful.

      NSPH got a downgrade by some firm I've never heard of. Buy to hold with PT remaining at 4.

      Delete
    4. JBmaderaAugust 30, 2012 at 7:24 AM

      http://tda.thinkorswim.com/manual/dark/studies/studies%20library/C-D/DarvasBox.html

      Basically it looks at the phenomenon of "coiling", building buy or sell pressure, when an equity breaks out, either above or below the "box" that can be used as a go long/sell short indicator. I reading Darvas' book right now. It's old, he was trading actively back in the mid 50's, pretty interesting so far.

      Delete
    5. JBmaderaAugust 30, 2012 at 7:24 AM

      Thanks Kyle, I did not see that.

      Delete
    6. KyleAugust 30, 2012 at 7:30 AM

      It'll be interesting if he's right re. SPX in one big Darvas Box now and eventual breakout ...

      "What if Darvas were to look at the S&P 500 as a whole today?

      The below chart illustrates a compelling picture for long-term investors -- the largest Darvas Box of my lifetime. Now, I am not saying to rush in and buy the market tomorrow, but eventually the S&P 500 will break out of its decade-long range."

      Delete
  10. 2nd_aveAugust 30, 2012 at 7:31 AM

    I caught a fleeting glimpse of UNG printing 17.90 for exactly one second before it jumped back to 18.06.

    ReplyDelete
  11. AnonymousAugust 30, 2012 at 7:38 AM

    Storage report pretty much a non event. i still think we get a flat close and trading around the 200 DMA over the next day to 3 days...then we rally hard.

    seriously, look at how similar this is trading to the overall market back in july 2009. throw some 50 dma and 200 dma lines in there. it is an exact replica

    ReplyDelete
    Replies
    1. AnonymousAugust 30, 2012 at 7:40 AM

      if we rally hard before next week then i'll take it

      Delete
    2. AnonymousAugust 30, 2012 at 7:41 AM

      a rally into storage season is what people least expect. surely we're going to have a nasty storage build. i wouldn't be shocked to see $3.5 by November.

      Delete
  12. AnonymousAugust 30, 2012 at 7:42 AM

    here comes the crash in silver.

    ReplyDelete
    Replies
    1. AnonymousAugust 30, 2012 at 7:46 AM

      i'd highly advise getting out of silver. debating going short it.

      Delete
    2. 2nd_aveAugust 30, 2012 at 7:51 AM

      Silver? Almost everything's about to crash, bro.

      Delete
    3. AnonymousAugust 30, 2012 at 7:56 AM

      a bit dramatic 2nd? i think there's a chance we pull back some more possibly to 1,330 but i would be using any pull back to get long. NOK at $2.5ish would be a nice entry point. i'm keeping my eyes on the ball. watching those stocks that started running into the top. those ones will be leaders after this pullback.

      Delete
    4. MarkWAugust 30, 2012 at 7:57 AM

      That could be one big island top.

      Delete
    5. AnonymousAugust 30, 2012 at 7:57 AM

      one thing to keep in mind....for whatever reason natty tends to trade opposite what the market does this year. if we pullback i'd expect natty to rally.

      Delete
    6. 2nd_aveAugust 30, 2012 at 8:05 AM

      Not really. Just going with my take, which is a down trend on the heels of (or maybe ahead of) a global recession.

      Delete
    7. KyleAugust 30, 2012 at 8:14 AM

      FWIW, I've been following this guys market commentary for the past couple of months. May be of some interest ...

      "The obvious ES target would be rising channel support in the 1368/9 area, and that would fit with the low quality H&S on SPX, but the strong support in the 1379 - 82 area on SPX is the first target and may well hold ..."

      http://www.channelsandpatterns.com/

      Note: I need to kill the 'Shockwave Flash' process as it captures 80% of the processor due to the video advertisements.

      Delete
  13. Telestar3dAugust 30, 2012 at 7:52 AM

    offed UNG at 18.25 small loss

    ReplyDelete
  14. MarkWAugust 30, 2012 at 8:03 AM

    GL ladies.

    ReplyDelete
  15. ChickenpookieAugust 30, 2012 at 8:05 AM

    NG - So when are new longs squeezed?

    BOIL - Okay, got a bid at $37.50 on this one, in case recent low is retested.

    ReplyDelete
  16. ChickenpookieAugust 30, 2012 at 8:58 AM

    NG - No pullback it seems, just up...

    ReplyDelete
  17. 2nd_aveAugust 30, 2012 at 9:06 AM

    Let me just on record as saying 'I can't ----ing believe I sold UGAZ yesterday for a 0.20 gain!'

    ReplyDelete
    Replies
    1. ChickenpookieAugust 30, 2012 at 9:12 AM

      Hey, at least it was a gain. Kinda looks like the beatdown was a shakeout...

      Delete
  18. AnonymousAugust 30, 2012 at 9:16 AM

    Chart to Watch:
    http://stockcharts.com/h-sc/ui?s=$WTIC:$NATGAS&p=W&b=5&g=0&id=p97539611662

    Daily:
    http://stockcharts.com/h-sc/ui?s=$WTIC:$NATGAS&p=D&b=5&g=0&id=p25357970412

    Look at the Daily Chart...couldn't even get to the 200 DMA before turning down. Parabolic blowoff tops tend to rally like this (i.e., feebly) and then fade. This will revert to at least the base which is 20. Do the math if Oil is at $90 or even $80.

    ReplyDelete
    Replies
    1. ChickenpookieAugust 30, 2012 at 9:50 AM

      It looks to me like $WTIC:$NATGAS is trending up.

      I have no idea concerning how the hydrocarbons are collected, possibly the NG component is actually byproduct?

      Delete
    2. AnonymousAugust 30, 2012 at 10:01 AM

      i think this longer term chart paints the picture better of just how much of a bubble the oil to gas ratio got to:
      http://3.bp.blogspot.com/-zH1mVO39eUI/T4Yyz1Ff9uI/AAAAAAAAA5g/eo4hUlEpwo4/s640/Picture1.png

      we're on the other side of that peak now.

      some other parabolic charts:
      Nasdaq: http://4.bp.blogspot.com/-6EWdbjTr_PU/TwSvWAYGlmI/AAAAAAAABE8/qRA5uI2S8lE/s1600/nasdaq+bubble.png

      Silver: http://www.casee-feualg.org/wp-content/uploads/2011/04/silver-bubble-2011.jpg

      Apple: http://www.hardrightedge.com/edge/wp-content/uploads/2012/05/aapl521m.gif

      TZOO: http://www.zentrader.ca/blog/wp-content/uploads/2011/09/TZOO-Technical-Analysis.png

      TASR: http://bespokeinvest.typepad.com/bespoke/images/2007/06/28/tasr.png

      Delete
    3. ChickenpookieAugust 30, 2012 at 10:29 AM

      "we're on the other side of that peak now. "

      You certainly may be correct, for all I know the NG production can possibly be modulated independent of liquids collection.

      Delete
    4. AnonymousAugust 30, 2012 at 10:40 AM

      there are associated gases as a result of oil drilling which is probably keeping production high. i'm not smart enough to know all about that. just looking at the chart.

      Delete
  19. DavidAugust 30, 2012 at 10:32 AM

    "Just going with my take, which is a down trend on the heels of (or maybe ahead of) a global recession."

    2nd, if we do get a global recession, then all sort of stimulus will be applied all over the world and the PM sector will explode -- the ratio ^HUI:Gold got to a 30-year low in mid-May precisely because people thought that the economy is recovering gradually and there won't be a need for any more stimulus...

    ReplyDelete
  20. DavidAugust 30, 2012 at 10:34 AM

    Let me see if I can pick up some April $2.50 calls on AUMN. Placed a buy limit order for 10 such calls at $2.50...

    ReplyDelete
    Replies
    1. DavidAugust 30, 2012 at 10:58 AM

      Raised my buy limit to $2.60, and still nobody is selling me such calls! I am the highest bidder right now...

      Delete
  21. DavidAugust 30, 2012 at 10:46 AM

    So if you think that UNG is destined to zoom up, why not buy some XCO now? It is below $7 again, and has not broken yet out of the horizontal channel it established in February...

    ReplyDelete
  22. KyleAugust 30, 2012 at 10:59 AM

    $SPX - Possile HnS formed ...


    Springheel Jack ‏@shjackcharts
    #SPX Chart for the afternoon:

    http://www.screencast.com/users/springheel_jack/folders/1208/media/9765bdda-746d-4fdb-966f-44da90f87354

    ReplyDelete
  23. DavidAugust 30, 2012 at 11:05 AM

    OK, screw it. Cancelled my buy limit for AUMN calls and instead purchased 1000 AUMN shares at $4.85. Even though buying shares rather than options increased my margin debt, the drop in my margin buying power was about the same, because AUMN is still marginable at ETrade.

    ReplyDelete
  24. DavidAugust 30, 2012 at 11:07 AM

    I think today is a simple profit taking ahead of the Jackson Hole, and since GDXJ has been selling off for a few days now, very few speculators are still holding and most of them are on the sidelines now, waiting to jump in if Bernanke says something positive. So if he DOES say something positive, we should see a huge jump in GDXJ, as all the sidelined speculators will start piling back in.

    ReplyDelete
  25. MarkWAugust 30, 2012 at 11:15 AM

    DDMG- Man, this one usually only drops about 6% per day.

    ReplyDelete
  26. AnonymousAugust 30, 2012 at 11:57 AM

    "So if you think that UNG is destined to zoom up, why not buy some XCO now? It is below $7 again, and has not broken yet out of the horizontal channel it established in February..."

    Because the economics of shale gas are horrible. I believe nat gas will move much more than the NG companies if nat gas goes higher.

    ReplyDelete
    Replies
    1. AnonymousAugust 30, 2012 at 11:58 AM

      wow i just looked at exco...look at those cash flows...yeesh. and their equity is dwindling extremely fast. no wonder the stock is down so much

      Delete
    2. ChickenpookieAugust 30, 2012 at 12:29 PM

      "look at those cash flows"

      Yeah, amazing how so many companies seem to enjoy blowing shareholder capital on crap that never pays off...

      Delete
  27. MarkWAugust 30, 2012 at 12:51 PM

    Bidding NSPH @ 3.22/.20

    ReplyDelete
    Replies
    1. AnonymousAugust 30, 2012 at 1:49 PM

      what's the thinking mark?

      Delete
    2. AnonymousAugust 30, 2012 at 1:51 PM

      based on stochastics and MACD its in pullback mode until the next buy signal shows up. perhaps the 50 DMA at around $2.95 is the ideal entry without those other signals telling us its a buy?

      Delete
    3. ChickenpookieAugust 30, 2012 at 2:56 PM

      Buy NG instead! I missed my chance yesterday and again today...

      Delete
  28. Port2017August 30, 2012 at 3:08 PM

    I sold my 100 shares of CHUY yesterday at $18.75. Today it only jumped up $1.28 from yesterdays close with a last trade of $20.53. I showed them.

    ReplyDelete
    Replies
    1. 2nd_aveAugust 30, 2012 at 3:47 PM

      Yeah, I showed them too, bro. UGAZ only jumped +$3 from my closing price yesterday morning.

      Delete
  29. 2nd_aveAugust 30, 2012 at 4:03 PM

    new post

    ReplyDelete

Subscribe to: Post Comments (Atom)