Thursday, April 25, 2013

04/25/13 Spectator

Miners rallied yesterday while spot prices for the physical (gold and silver bullion) remained muted. Today spot prices take off (gold +2%, silver +4%), while miners (GDX, GDXJ) remain muted. The other notable event was that buying in miners accelerated in the final half hour of Wednesday’s trading, and trading volumes closed well above-average.

(a) It’s not uncommon to see miners rally 15-20% in the space of a few days, effectively locking out buyers. We may be watching a launch here.

(b) It’s also not uncommon to see miners launch a 15-20% head fake prior to (i) retesting recent lows, or (ii) selling off an additional 25-30%.

(c) It’s a volatile sector, and one reason I tend to close positions after 1-2 day holding periods.

Only scenario (b) fits my trading style. So I’m content to watch from the sidelines.

83 comments:

  1. by the way CP i think BIDU usually reports later...

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  2. GMO/YRCW- Holding these two is a really hard way to make money, yet my balance keeps creeping up somehow.

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  3. BIDY - Well, that's par for the course.....

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    1. this is why i hate holding through earnings. its just not worth it. you can get a BYD type move, sure, but you can also get hosed.

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    2. The final clue was the consensus price objective, seems like they never high-ball something unless they're dumping.

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  4. GASS is setting up for an "above the green line" buy when the Slow Stoch turns and trades above 20. I would think you would step back from the technicals though when they have STUFF like a new share issue going on.

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  5. Thank you for your congrats, folks! It looks like the world *has* changed for the better on Wednesday morning -- even the market gods are smiling at me. :)

    Today, only 2K shares of PNPFF were purchased for me at $0.40 before it took off (I placed a buy limit order for 10K shares yesterday). Now I have 32K shares total. If PNPFF never revisits $0.40 again to fill the rest of my order, then it will probably go much higher, which is OK with me.

    I really liked the fact that SLV rallied today -- it was pretty weak after the crash, which threw doubts on the sustainability of the rally in GLD. Now things are looking up for gold/silver...

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  6. Crash tomorrow? It is decidedly so.

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    Replies
    1. I have no idea...just throwing it out there.

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    2. Probably. GS said go long IWM after the close.

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    3. By my novice assessment, if we put in a new high on SPX then pull back to the lower BB ~1539, we're looking at an inverse H&S, which projects to nearly 1660

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    4. Some of the reversals in energy where ugly, but some finished very strong. It was a really strange day.

      QLIK was strong AH.

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  7. I see Jesse has been posting about FNMA. Check this out:

    http://www.thestreet.com/story/11667835/1/bass-cuts-bait-on-dead-fannie-and-freddie.html

    Look at the date of this article. Look at the chart of preferreds to see when the article came out. 6 bagger since.

    http://finance.yahoo.com/echarts?s=FNMAP+Interactive#symbol=fnmap;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

    Why people continue to think that Kyle Bass is some genius is beyond me. Wasn't he also very bearish on Japan?

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  8. GMO - Speaking of IH&S's, you don't suppose lunatic traders will fill the gap down from $2.50, do you? From a perspective of the sport of trading?

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    Replies
    1. Yes, that's the gap I'm focusing on, there may be others.

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  9. NOAH is still hanging in there. If you look at the weekly chart, and squint a little, you can see a cup with a handle.

    But then you can also see a MACD looking like it wants to roll over and a stock that has traded below its 10 MA for the last 2 weeks. I still have it.

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  10. Am I the only unfortunate soul who still watches NIHD?

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    1. sounds like one of those CSI detective shows.

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    2. I was watching that today actually. $4 to $9 in three weeks. effin A. we knew it was gonna be a wild ride, but nothing like that.

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    3. That chart's more asymptotic than it is parabolic.

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  11. Just don't buy anything with a PE of less than 200

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  12. •National Instruments Reports Record First Quarter Revenue

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  13. PMT - •PennyMac upgraded to Outperform from Market Perform at Keefe Bruyette

    REIT Bubble stock

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  14. BIDU - Are these guys pulling on my leg?

    Baidu.com: 1Q13: a step deeper into investment stage
    4/26/2013 8:40 AM

    1Q13 marked 2nd quarter of investment stage for co. We raise 13/14 sales by 7% but reduce EPS. Tune down PO to US$123 (from $125).

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  15. Trying a little HDGE @ 17.26...

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  16. New all time highs today? It is decidedly so.

    Yes, I went from crash to all time highs. Then again, I'm just sitting watching the wheels go round and round. I really love to watch them roll. Speaking of which, you think anyone got shaken out of ZNGA?

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    1. UPS earnings seemed solid.

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    2. Forward PE is less than 200, don't buy it!

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    3. Crash alert back on! just kidding.

      SAIA continues to kill it. Now trading at 0.60 times sales. Industry avg is around 0.40 to 0.50. YRCW fully diluted is trading at 0.03. ABFS, next lowest, is at 0.15.

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  17. JCP - What happened, George Soros?

    Will that be one hump, or two?

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  18. Replies
    1. What's your conviction here chicken?

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    2. Trying to trade my way out of a paper bag.

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    3. Scalping in the range of ~$84.20 to ~$84.80

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  19. My Note phone has the coolest file sharing feature. Kendra has the Samasung tablet thing and it shares files just being near each other.

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    Replies
    1. We used to share files back and forth on our Palm IIIc's

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  20. BIDU - I'll be trading in and out at least through the end of this week.

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    1. If we go back to today's high, my position will be flat with original share count. Need one more cycle, so back in line bobbing for apples.

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  21. GASL - I had a target today for $19.45 but canceled my order due to BIDU fiasco, maybe it's kind to me and just moves on back down to an even better price?

    BTU - Is it bird flu or coal smog? I can't tell, the air's too thick and my eyes are burning.

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  22. He made it to 81. A fitting classic.
    http://www.youtube.com/watch?v=1etY_dNovCw

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  23. Crash alert - SPX closed a $0.01 gap down yesterday.

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  24. KWK - $2.55 seems like good support, I like the insider ownership on this one, not sure about the rest of it being of consequence.

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  25. AUMN is nicely green, that little rascal! ;)

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  26. "My Note phone has the coolest file sharing feature. Kendra has the Samasung tablet thing and it shares files just being near each other."

    Isn't that a privacy/security issue?

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    Replies
    1. "Isn't that a privacy/security issue?"

      Only for the recipient.

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  27. Some of these stocks are friggin bipolar I swear. Look at the moves in SNE, ZNGA, YRCW, BIDU, NOK, ANR recently.

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  28. TZOO is getting into momo gear. Hotel booking platform coming on stream at the end of the year and will provide a nice boost to bottom line.

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  29. AGO - Crap, this one reported 4/23 and even closed the gap up....

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  30. It's mining investors that are bipolar. GDX -3.6% after a +7% rally the previous two days. It may be Scenario B that plays out.

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  31. 'My Note phone has the coolest file sharing feature. Kendra has the Samasung tablet thing and it shares files just being near each other.'

    What's happened to you, bro? It's not the kind of thing that helps when in the midst of brutal combat.

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  32. I’m going to fade the selloff and buy back in. RYPMX at the close. Why? There’s really no good answer, and not a recommendation to anyone else. My take is another shakedown prior to resumption of a dead cat bounce.

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  33. SAIA up 100% since the market lows in Nov. Nice move.

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  34. BIDU - Bounce players looking for their exit.

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  35. NATI - Wish I'd noticed today's action early on.

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  36. http://seekingalpha.com/article/1361881-new-home-sales-march-2013

    This chart alone makes me bullish for the long term. Demand from new household formations will continue to be a driving force in returning to a normal housing market, normal credit markets, etc. We still have way too little supply which is why we have bidding wars in many areas, including San Diego. Improved housing markets are a game changer for the overall economy. We may have mild recessions along the way but the housing market will be buoyed by the fact that supply still doesn't come close to demand in many markets from everything I've read.

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    1. "supply still doesn't come close to demand"

      Honestly, I don't think it ever has, except perhaps for brief periods.

      Also, consider that as the housing market peaked I noticed rate of new home construction began suppressing used home prices. Not sure how that ties in exactly, but maybe the scales tipped briefly and created some kind of avalanche?

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  37. Have a great weekend guys, but before I sign off, I wanted to remind everyone that the National Electrical Code specifies that the wider "neutral" electrical terminal on the left is the grounded conductor while the round (third) terminal at the bottom is the grounding conductor.

    At ease!

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    1. Oh, and don't stick your finger into the terminal on the right. Don't ask how I know this....

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  38. Looks like the "baby effect" on AUMN is stronger than I initially thought -- it even overwhelmed today the negative GDXJ/SLV effect! :)

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    1. At this point, I would say the miners have had their crash. Looking beyond short-term volatility, which is likely to be high, you might say we're sitting at a 'generational low' for GDX/GDXJ.

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    2. Big call for a tiny little guy in a black suit!...Serious?

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    3. If you think this way, will you put aside a small percentage of your port in RYPMX with the intention of not looking at it for a year?

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  39. Nanosphere announced the appointment of Ken Bahk, Ph.D. to the newly created position of Chief Strategy Officer and the departures of Tim Patno as Chief Technology Officer and Chad Mirkin, Ph.D. as a member of the board.

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  40. I don't know what is going on with the many management shakeups. I suspect that it's part of the transition from a deep R&D company to a marketing and sales company. What I do know is that the stock has been going up lately. I continue to hold.

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  41. Everything you wanted to know about the dark side of the moon, but did not know what to ask.

    http://www.ritholtz.com/blog/2013/04/making-of-dark-side-of-the-moon-3/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29

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  42. NUAN - Up 14%, with a few days to go b/f earnings
    IEP - Up 30%, looks like earnings Monday.

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  43. The key word is 'might.' Let's say gold holds at >1000 for the next 20 years, and furthermore that the GLD/XAU (or XAU/GLD, whatever the convention) ratio reverts to the mean. In that case, today's prices will have been a generational low.

    I haven't been able to hold any position for a year, and I don't expect that to change.

    We've seen plenty of reversals in fortune in the markets. Over the next 6-12 months, it's easy to see how Hussman, Paulson, and Vengerov come from behind and move up in the Indy 500 rankings.

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    1. I just incorporated all of the above into a 'new post!'

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