Wednesday, May 1, 2013

05/01/13 Sell in May

What's the bet, guys?  It actually starts to sell off today?  Let's check in with Eisenstadt first:

http://www.marketwatch.com/story/sp-500-will-be-at-1700-on-halloween-2013-05-01?dist=beforebell

87 comments:

  1. I believe this guy. He has a great record. The question is how much volatility between now and then.

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  2. http://www.kitco.com/charts/livegold.html

    Riiiiiight.

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  3. I fully anticipate sell in May, and nothing would surprise me, 1700 or 666.

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  4. GASL - I lowered my bid $1, to $18.45

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  5. GMO - I should buy this one here, no doubt it will reach $1.99 resistance before end of week.

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  6. EAC - I'm gonna say this one has peaked.

    Just found it, why aren't our helicopter guys telling us about this kind of neat stuff?

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  7. PMT - Off @ $25.22, seems to have stalled and I'll take the $1/share gain before it disappears.

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  8. TXT - Big bear flag about to take another leg down, it seems.

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  9. BCOV - my old boss had 50k shares of this from $6. He said through the drop to the 4's. Helluva trade. He's one lucky SOB this year...he bought MLNX, PAY, PLCM, and FIO this past year and made a boatload on all of them right before the bottom dropped out in each one.

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    1. Seems like he knows what he's doing somehow, need to keep a close eye on him to see if it's possible to learn something. ;)

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    2. Finviz reports 80% insider selling, but YHOO's data only shows 10%, insiders holding 7% of float?

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    3. some of the things he picks are dogshit to be honest, but he has done very well timing his exits perfectly. he was all about AAPL when it was around $500 but I think he bailed after small losses.

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  10. MM - This company makes mobile advertising s/w, might be a good one to keep an eye on?

    I can't understand why it's such a challenge to flood an ipad page with advertising.

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    1. wow nice find. i need to remember to look at that one.

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  11. SYNC...wow. I recall there being a big insider buy recently.

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    1. I think FiOs is gonna prove to be the way to go, light pipes are gonna rule, IMO. I'd like to hear alternative arguments.

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  12. Never understood sell in May - take a look at http://www.crossingwallstreet.com/archives/2013/04/sell-in-may-the-historical-record.html

    It's really just Sept/Oct that need to be avoided.

    Sell in May has worked well the last 3 years, but I don't think I've ever heard it talked about as much as this year, which is probably an indication that it won't work.

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    1. "probably an indication that it won't work."

      Yeah, the only reason I consider it is due to the fundamental of WS heading off to the beach and not leaving themselves exposed. The real selling kicks in afterward, as people begin to realize the trend.

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    2. Being at or near all time highs doesn't help. Maybe this leads to 1700 by October, the market may need the rest. It's hard to mount a big move off the top of a previous big move. The last pullback is a good example of how that works.

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    3. Just to add. Defensive issues are doing pretty good while everything else looks toppy.
      Consumer non-durables, utilities, drugs look good.

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    4. Yeah, I'm thinking about shorting the next pop, hope we get another high.....

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  13. MBI - Doesn't seem to be falling very fast anymore. Finviz's insider selling data seems to be wrong in comparison with YHOO's, YHOO doesn't report any insider sales, by my calculation shows 17M shares owned, a 10% insider ownership?

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  14. A little inspiration for you guys this lovely HUMP day:

    http://vimeo.com/63173106

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  15. PDH - Might be a bull flag formation, divy is variable but pretty decent.

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  16. I can't find anything exciting... BTU comes close maybe, but I'm unconvinced.

    I know there are stocks out there, just can't make myself do it.....

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  17. It seems like all prior relationships in the market are getting reversed. This is hard. $USD today broke below its April lows and gold/silver are selling off hard. $USD is almost $2 lower than the late-March peak, and gold/silver are also lower as well. Is the whole system coming apart?

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    1. David - I'd encourage you to look at the relationships between the two further back than just the most recent trends over the past 10 or so years. I've been saying this since 2009 but gold bugs and permabears keep mentioning it as the only reason why the markets have been going higher. The market went higher in plenty of periods in the past when the dollar was rising.

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    2. You're guesses are as good or better than mine....

      Sell in May kicking into gear? Could be a fakeout attempt.

      China manufacturing data reported weak (supposedly), is it in China's interest to under report, ie: commodities drop?

      Nervousness ahead of tomorrow's jobs report?

      Taking profits at peak while they're there?

      Was the White House just "bombed" again?

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    3. Euro up means market down, for some reason(I personally don't see why a strong euro is such a good thing, Germans are strange people, I dislike their arrogance, nobody likes watching them hike naked through the Alps, or carrying resistant strains of gonorrhea to Japan). Dollar down means euro up, right?

      1587 holding, so bears haven't won.

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  18. INTC - a 20% gain from $20 -> $24

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  19. 1587 is the line in the sand, let's see if bears can get some momentum. Maybe they can't....

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  20. BMY - Survived a test of the 50SMA, it appears.

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  21. FLY - Holding up pretty dang well for an overpriced(according to BACML) stock.

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  22. CC:
    http://www.businessinsider.com/birinyi-debunks-defensive-stock-myth-2013-4

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    1. Recently the charts say otherwise. Not that other individual stocks haven't done well, they have, but as far as sectors, cyclicals have been pulling back/rolling over and defensives have been stronger. I just go by the charts and the service database.

      I see it every night on the service, so Laslo can do what he wants in the long run, but the database is finding a lot of shorts waiting to trigger (which is to be expected at all time highs) and only a few longs, one of which I believe is well watched on this blog.

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    2. Has the database been finding a lot of shorts / being cautious for a while now? I just recall Landry being quite cautious since last spring.

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    3. Just recently.
      We have been net long for some time now. We did have a few shorts that stopped out with profits while the longs in other sectors (mainly biotech) did quite well.

      Right now we have no new long or short picks which is indicative of the market itself.

      I don't think you have a good understanding of how the methodology works. It isn't complicated, if the market is trending up we are long. If it is trending down we are short. If it is range bound we hold the current positions (with some exceptions long or short on individual issues) and we sit on our hands. When the database is picking longs or shorts we WAIT for the trigger. The market chooses. We trade what we see.

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    4. I should add, we don't have any official shorts, but the database IS full of potential shorts and one long. We don't have any triggers yet. If we close where we are right now that may change.

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    5. My take: banks and housing sector still leading. That's bullish. Transports merely consolidating a monster move. Markets consolidating around all time highs. It's all good.

      BTW - When you say we are you referring to you and Landry or is that the commentary he is saying?

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  23. Yin vs Yang:
    http://www.businessinsider.com/stock-market-crash-2013-2#

    http://www.businessinsider.com/why-the-bull-market-can-continue-2013-3

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  24. Market always softens when gold drops a nut.....

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  25. Mark - you see VELT lately? Chart looks interesting. Same with GLUU and COOL.

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  26. FMD continues to perform well. I like this one a lot on a further drop.

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  27. TXT - Man, still refuses to close the gap up from $24.82, I guess it's coming though, make it so.

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  28. Ascending triangle being built out in ANR. Earnings tomorrow. If it breaks above $7.6 it could be game on. This bottoming pattern reminds me a lot of the TZOO bottoming pattern from late last year.

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  29. RLGY - Reports today, I guess in AH.

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  30. Hey guys – I think it's time to buy CECO. I may have mentioned this comment below before but its worth repeating:

    ""Highlights
    Consumer credit is surging but outside of student loans, it looks flat. Consumer credit jumped $18.1 billion in February for the largest increase in nearly 13 years and following a revised $12.7 billion in January.

    But gains continue to be confined almost entirely to non-revolving credit, in part reflecting strong vehicle sales but largely reflecting a continuing surge in student loans."

    Look at the weekly chart:
    http://stockcharts.com/h-sc/ui?s=CECO&p=W&b=5&g=0&id=p24124447599
    ATR is dwindling to nothing and the past 3 weekly closes of $2.16, $2.17, and $2.19. It's not out of the realm of possibility that this reverts 1/4 to 1/3 of its losses from 2011. That means a move to $8 to $12. That's a 4 to 5 fold move.

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    1. I spent the time to calculate their loss/employee, and came up with $29,000/employee

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    2. haha. Only figures you need to know:
      $410 million in net cash
      $150 million market cap

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    3. They've got about two more years for partying down on shareholder capital, having a good 'ol time like there's no tomorrow.

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    4. per last CC they are in the process of significantly paring down overhead.

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    5. $410, hmm, that's more than Finviz reports, by $100M Numbers are all over the place, no telling what's right or wrong. Could be CECO burned $100M this Q?

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    6. yeah i see a diff # on morningstar. I'm seeing $310 million. still looking through everything. love the chart.

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    7. Looks like cash increased by $100M last Q, to $338M, so if the trend remains then $410M seems plausible.

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    8. Thus, I'll guess the $410M figure must be estimated, and assumes a positive earnings trend.

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    9. Chart could be bottom of a cup, I guess that's what you see. Certainly could be bottom of a cup, if the earnings have in fact swung positive.

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    10. not sure what to trust:
      http://finance.yahoo.com/q/bs?s=CECO

      i see Cash & CE + ST Inv + LT Inv of $408 million and no LT debt.

      Earnings don't need to swing to positive. Just need a sniff of positive news. After all this is priced for death at 0.25 times book and 1/2 times cash.

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    11. Looks like Blum stopped selling shares about two weeks ago, they must be receiving shares b/c their total doesn't decline at the same rate as shares sold.

      They must be converting debt into shares? So debt is decreasing?

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    12. "priced for death"

      Right, that what concerns me!

      But cash rose last Q, obviously there's something going on that's over my meager comprehension, but where'd the $100M cash increase come from? Of course there are cash equivalents and inventory(like books and supplies maybe), but I wasn't including that, just cash build. Growing cash is an indicator of positive revenue, isn't it? Or some kind of trick like sale of assets, or cash from increased debt or something? Finviz doesn't show huge debt, and I can't find much on the YHOO balance sheet, maybe BLUM is trading cash for shares?

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  31. BRCD - Just happened to look at this one out of chance, looks like it got thrown under a bus or something right before close.

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    1. Looks like BRCD had a press release and some astute newsletter members received their memo prior to close.

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  32. HXM - Gap down needs filling, got balls?

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  33. It's just a one-day selloff for now. Too early to open any positions, IMO.

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  34. Miners? I don't consider today a 'test.' A test would be, as Deron used to day, a decline that undercuts the previous low. That would really scare the ---- out of goldbugs.

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    1. GDXJ looks like a bear flag formation to me, suggesting at minimum, a $5 discount from here if it plays out.

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  35. ING starts trading tomorrow under the symbol VOYA.

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  36. TXT - Even the kiss of death memo was broadcast:

    "Textron Raised to Overweight From Neutral by JPMorgan >TXT April 18, 2013Dow Jones"

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  37. Spain's unemployment is 27%, maybe the ECB should raise rates, how does 12% sound, think that should really get the euro flying? Germans ought to love that.

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  38. CP, do you know why BACML thinks FLY is overvalued?

    Seems undervalued to me, but maybe I'm missing something.

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    1. Here's much of what they said:

      "Staying on sidelines, modest pressure on margins/revenues Despite seemingly inexpensive valuations, we remain on the sidelines regarding the aircraft leasing equities. Lease rates have generally trended lower over the past year, and we see little reason for upside over the next six months, but a protracted period of low rates tends to support long-lived assets like aircraft. We maintain a Buy rating for AerCap (AER), Neutral ratings for Aircastle (AYR) and
      Air Lease Corporation (AL), and an Underperform rating for Fly Leasing (FLY).
      Currently, there are too many planes The number of competitive parked planes has rarely been higher, aircraft hourly utilization is well below peak levels, airline profitability outside the US is below its anemic long-term average, and lease rate growth has been anemic – all indications that there are currently too many planes. With planned record deliveries over the next few years, excess supply may persist unless economic activity accelerates or jet fuel prices fall significantly.

      Headline risks decrease as airlines move into peak season
      After several years of below average bankruptcies, the number of airlines ceasing service has returned to trend (25 a year). Airline cash flows are seasonally lowest in the fall and winter quarters when more than 60% of all airline shutdowns occur, and headline risk diminishes as we move into peak spring and summer months.

      Debt capital markets remain friendly
      Fears about the availability of capital have proven unfounded as Asian and US banks replaced reduced funding from European financial institutions, and the US public markets (EETCs for airlines, unsecured debt for lessors) reopened.
      Managements return more cash to shareholders

      AER accelerated its share buyback program, AL initiated a dividend, AYR raised its dividend and repurchased stock, and FLY further lifted its sector-high dividend yield (6%). Management actions show their confidence in the underlying value of their shares, yet financial sponsors are reducing their exposure to the sector."

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    2. This report was dated 10th of March, so maybe the dynamics have improved?

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  39. FMAR - I think this one reports around the 15th

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  40. BALT - Up post earnings, despite a 0.07 miss beat on revenues

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  41. Oil inventories at historic record highs.

    AMD - Well what do ya know!!!! ;)

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    1. $91 crude oil isn't exactly cheap, I wouldn't call it a crash.

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  42. SPX IH&S - We need a pullback for this pattern that projects to 1660, the pullback might be to ~1564?

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    1. SPX - there is a Yearly-R2 PP keeping a lid on things for the moment ...

      http://mpgtrading.blogspot.com/

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  43. Adjustable Rate Treasuries - Sounds rather creative, huh?

    http://online.wsj.com/article/SB10001424127887324766604578457170494318996.html

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  44. VMW - $70.09 - Another higher low

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