(a) Gold and miners have further to fall before a sustainable advance.
(b) A significant correction is in the cards. I wouldn't try to time it, however.
(c) It's likely to be a good year for the stock market and for real estate, but a poor year for employment.
Gold - I have faith in Brandt's chart analysis, until it's proven incorrect.
ReplyDeleteIs this your gut feeling, 2nd_ave, or did you read it somewhere?
ReplyDeleteIt's 'common sense,' David.
Delete(a) Gold and miners. There's been serious damage, followed by a bounce. What do you think happens next?
(b) The market always pulls back. But only when least expected, and to the benefit of the few (and not the many).
(c) Global central banks are able to prop asset values. They are not able to jump-start employment. And I don't see many signs of hiring in the Bay Area (one of the stronger economies). In my sector, just the opposite.
AGNC - Months of pumping this one turned out really, really bad.
ReplyDeleteSeems like if the Treasury has less debt to sell going forward(due to sequestration), this means mREIT's face continued competition with the FED. FED probably enjoys that fat spread, and the FED can buy as much as they like, considering their pockets are infinite.
DeleteWell, if you want some support for a miner bounce,
ReplyDeletehttp://www.theglobeandmail.com/globe-investor/inside-the-market/junior-mining-stocks-see-record-insider-buying/article11638717/#dashboard/follows/
Junior mining stocks see record insider buying
The gold sector is clearly driving a lot of the buying enthusiasm. The INK Gold Stock Indicator – which tracks insider buying on all Canadian-listed gold stocks and is heavily influenced by junior miners – has now surpassed its March high and is over 1,000 per cent, according to Mr. Dixon. That’s more than 10 stocks with key insider buying for everyone with selling.
The indicator hit an all-time peak of 1,046 per cent last Thursday.
Not that I personally am putting any money there. I think at this point, you are just playing for a short term bounce, not a 2 - 4 year bull market like in many other sectors.
DeleteThere are some folks saying the US Treasury will likely have less debt to sell going forward, so maybe some of those insiders are running out of options?
DeleteTime to sell the 18 old Bronco that I only put 27k miles on before I parked it in the garage a decade ago:
ReplyDelete"Ferrari - It appears that younger auction shoppers who don’t want to pay top dollar for an Italian exotic are turning to more affordable alternatives, such as classic trucks(such as Ford Bronco). The vintage SUV market has grown 65 percent since 2008, according to a report by the Michigan-based Hagerty Price Guide."
SCTY - Man, you guys were right, this thing has done pretty s*ty
ReplyDelete$28M Judgement in favour of Avcorp
ReplyDeletehttp://finance.yahoo.com/news/judgement-favour-avcorp-203900041.html
Textron's quarterly profits are just north of $130M
It was just over $110M this Q, so the award is ~25%
DeleteAIG - Tearing it up.
ReplyDeleteGoing back to my link on the junior miners having huge insider buying, it reminded me of when the bull market for metals started back in 2003.
ReplyDeleteDon Coxe, who was one of the first to call the mining bull, said the catalyst for the new bull was China modernizing and starting to consume commodities and would say it would be a long running bull because "people that know it best, love it least because they've been hurt the most", meaning that the surviving companies after the multi-decade waterfall decline were the conservative, safety oriented ones.
Anyhow, that certainly isn't the case now, with people who know it best loving it most, which doesn't mean we go down, but it does keep me away.
CP,
ReplyDeleteBrandt claims to have returns of over 40% a year for 18 years - very impressive.
Do you find his information actionable and get useful ideas from him? Do you just follow his web site http://peterlbrandt.com/
That's one freaking wild claim. If it's true, then he has bragging rights over just about anyone.
DeleteI only read his site, he's not always right but he claims to closes the trade when he's wrong (He doesn't fight the tape).
DeleteI believe he's honest.
The employment report is out of the way. Now we can go back to trading.
ReplyDeleteSeems like good news. Both previous months revised higher and rate down.
DeleteIf we get a nice slow and steady drop in unemployment, that is ideal for stocks in my opinion, as we will see steadily increasing demand from people with jobs, but nothing too hot to force a fast rise in rates.
YRCW reported an operating profit this mornings (still an overall loss, but very close) and stock up over 20% so far in premarket.
ReplyDeleteSure seem to be turning the corner. Been a rocky few months, but I think that in a couple of years, you will do very well with this stock.
The report was about what I was expecting, although I thought top line would actually grow and not shrink. I think bad weather had an impact on their business but I do like how they didn't really make any excuses for it. This factor goes away this quarter.
DeleteThe thing that sticks out to me is Salaries, wages, and employees' benefits rose from 56.13% in Q4 to 58.58% in this quarter. Q1 is usually the highest quarter. Last year it jumped from 56.6% to 60.6% in those two quarters. One way to look at that is this: if they had 56.1% like they did last quarter, they would have reported a NET PROFIT for the quarter which is huge.
Also they said the network overhaul will boost earnings by $25 to $30 million. Considering they would most likely be profitable in Q3 without this, then this will really boost earnings in Q3 and they could post some eye popping numbers. I think I mentioned like $0.50 to $0.75 EPS that quarter and it sure looks that way.
Crazy leverage in this business.
Yeah, but GMO beat by a penny. So there.
Deletehaha
DeleteHad to take some off at 10.70.
DeleteA little more off at 11.00. Will hold the rest hopefully for years. Un real call TOF.
DeleteNice work TOF! It jumps around and I expect it to pullback from this move, but I think it's a B&H for now. Congrats!
DeleteThat's impressive, GMO's beat. Haven't they already ordered some trucks and equipment? MOL.AX is still working with Hanlong, Hanlong owns a good chunk and they're operating profitably.
DeleteI'd love to know why Hanlong is interested in Moly, can't possibly be tighter pollution standards which dictate lower sulfur fuel, refinery moly catalyst is recyclable.
Thanks guys. I still think it's going to $30+ in 2014.
DeleteShorts scrambling to cover?
ReplyDeleteYRCW - Nice, good work guys! ;)
ReplyDeleteGood thing YRCW did so well, because FBN (Furniture Brands) stunk up the joint. Dumped my shares this morning.
ReplyDeleteWould have thought furniture sales would rebound with housing, and they probably are, but I think people are changing the places they shop. I know when I go to Ikea, the parking lot always has hundreds of cars, but next door at Sears Home Furnishings, there is usually only 4 or 5 cars.
BB - I've mentioned this before but the move online has been hurting a lot of retailers not able to take advantage of it. the furniture industry is kind of funky...there are older established players that don't want to bow down to the movement and I think they're getting hurt. there is still a major need to sit in and feel the furniture but the move online is going to continue.
DeleteMy wife was telling me even IKEA is starting to sell stuff on-line. Previously, you could just search stuff, then drive to the store to buy, but not they have an on-line cart and the whole bit.
DeleteFind us the next trend, TOF! ;)
DeleteAGO up this morning as Flagstar (the bank that lost the lawsuit to AGO) paid MBIA off today for a similar case. SO, even thought Flagstar said they would appeal the AGO verdict, doesn't look like they really think they will win.
ReplyDeleteMBI got smacked down a few days ago for losing one of these suits, I think.
DeleteCECO is looking good. I think it rips higher next week.
ReplyDeleteBlum isn't shy about selling at whatever price, it seems like.
DeleteReports Monday, there should be plenty of upside remaining even if earnings are good, shouldn't there?
DeleteWe're talking about an LT recovery, I think, one that could take a year or more with potentially lots of upside.
Trying a little UGAZ @ 29.06...
ReplyDeleteOff @ 29.17. Wimp.
DeleteTraders take their gains quickly, that's for sure.
ReplyDelete4 minutes. Enough for sushi.
DeleteFugu sashimi
DeleteI tried Uni for the first time last week. I'm not sure why I've never had it before.
DeleteMy favorite remains Ebi, alarming sophistication! ;)
DeleteHey man, where's the next resistance level?
ReplyDeleteWe're in free air....no way to know.
DeleteUGAZ @ 28.78...
ReplyDeleteOff 28.94...
DeleteOn again @ 28.90.
DeleteOff again @ 29.25.
MM has moved up in line with the crowd.
ReplyDeleteCP - On CECO, I just can't get over the fact that it has more than double its market cap in net cash (including debt). The kicker is:
ReplyDelete(1) it trades at 1/4 book
(2) they have communicated that they want to shrink their size
That says to me that they are going to sell off assets, which will further raise cash, and focus on the assets that are performing. They have a lot of room to maneuver a turnaround with that much money on hand and trading at 1/4 net asset value. The one concern I have and need to look into it further is if the cash is made up of student deposits and can't be used for operations...i.e., if there are any contingencies on it. I am making this up out of thin air but I would have to imagine that's how their business works in part.
FD:
I'm long from around this price.
Yeah, good job sniffing this one out, thanks for sharing.
DeleteDifficult to trade this kind of pattern:
ReplyDeletehttp://www.kitco.com/charts/livesilver.html
YRCW - I think it's safe to say it's forming a flag pole today. Then we look for it to turn into a bull flag, might not take long though...
ReplyDeleteBriefly pierced the 34EMA
It's volatile as a mofo that's for sure.
DeleteBTU - Retook the 50SMA
ReplyDeleteso umm...REDF?
ReplyDeleteTOF -- great call on YRCW! I don't even know why I am bothering with the miners, as I should just be following you into some weird companies just prior to their takeoff!
ReplyDeletewell for what's its worth miners are weird to me. digging up stuff from the ground and pretending it's worth more than the dirt around it seems like a funny business to me.
DeleteEverything comes out of the ground, and there's only so much there. Software is something we can never run out of.
Deleteyeah i guess i was referring to gold which really has no tangible value other than being a form of currency, right?
DeleteOil and coal come from the ground....it's just a matter of perspective.
DeleteGold isn't a currency anymore in any part of the world I know of, so no I can't call it something it's not. It used to be and now it isn't, just like anything else that ended.
DeleteAUMN is regaining its karma today -- up nicely with a flat GDXJ. All human traders have been kicked out of that stock a long time ago -- only crazy investors like me are remaining, with computers creating all the short-term moves, trying to outwit each other...
ReplyDeleteWhat pisses me off is, nothing ever seems able to hold onto it's gains. Except for the indexes, that is.....
ReplyDeleteNot sure why you say that CP. Lots of stocks are doing really well with just shallow pullbacks before resuming uptrends.
DeleteI think there has been a shift in the areas of the market which are working though?
That does seem the way of the market in many individual names recently, spike spend a month or so giving back and spike up again. YRCW, TZOO too many are out there.
DeleteTOF incredibily call on "YELLOW."
I let go all in the am at 11.35 and did not say anything as to not influence others as its a tough call. I just kinda of expect it to at least test back to the 9.6 to 10 area and not sure if it just drifts lower like before.
Again great call man!
BB nice job on NWLI, seem to recall that's your largest position, nice.
VMW getting perky, wonder if it holds?
CP - I agree with BB's take. Check out these: BYD, FSLR, TA, OWW...typically what I've found is after a long basing pattern, the first move almost always gets sold off hard. And that makes sense if you think about it from pure supply / demand. Those in early waited forever for the stock to move. It finally did and they want out, so supply increases. Those with enough patience to wait for a sign of a bottom won't buy until some sort of floor or retest is put in after the initial move, so demand mainly comes from day traders. The next set of buyers are the ones with patience and belief that a bottom is in. Most of the ones above had the same thing happen to them.
DeleteGood point. Truth be told there is alot of both, one just needs to get in line with what's working and get out of the way.
DeleteEspecially in a bull.
T3 - excellent move with YRCW! If I wasn't looking to hold this for another year or two I'd be cashing it in too. I mentioned this the last time it spiked and watched it drop 30% so I'm not naive enough to think it can't go all the way back to $8 or $7. One of these pops will stick eventually though and I don't want to be on the sidelines when that happens.
DeleteI here ya man the market is always a two edged sword.
DeleteThere is definitely something to the ability to read a balance sheet and interpret how things could change that light a fire. I notice on quite a few of your picks they have negative EPS and your idea is in its improvement to drive price.
I intend to get back in on YRCW and the days low may have been that opp.
Well, I'm not very happy about BIDU right now, maybe that's the crux of it. And now the FED's coming to steal my NLY gains in the same way they stole all David's money, by manipulating markets.... I think it's great you held YRCW through earnings, that tactic didn't work for me in the case of BIDU so call me gun shy, I guess...
DeleteInsurer NWLI up 7% today. Seems crazy for a stock that is incredibly undervalued and never seems to move, but a lot of the big lifeco's reported good numbers this week, so people are probably looking for leverage. Plus, I think people see the rise in interest rates coming and life insurers are the industry with the best leverage to this. They also reduced their costs and increased their prices as to be profitable on low rates, so as rates rise, profits will go up.
ReplyDeleteI'm not so sure about higher rates considering Treasury is likely to have less debt to sell. This leaves the FED with fewer options thus will likely turn to GSE MBS market, which means mREIT's will be forced to pay more.
DeleteI feel this explains the pressure mREIT's are experiencing, the FED hasn't stolen enough from the savers yet, to compensate bank losses.
No place left to hide, aside from bankrupt companies like YRCW....
or companies with enormous debt loads that can never be paid back (TA, BYD, CZR, OWW).
Delete"companies with enormous debt loads that can never be paid back"
DeleteThere ya go, now if only I could understand why these stocks actually go up.
NWLI - 8,000 shares were traded?
DeleteREDF - starting to move. full disclosure, I bought a whopping 2,300 shs at $2.699 this morning.
ReplyDeleteOur electric company needs to increase rates due to higher fuel costs.
ReplyDeleteI'm pretty sure fuel comes from within the ground?
Alright fellas. I followed suit and took about 1/8 of the position on YRCW off the table. nothing in life is guaranteed.
ReplyDeleteGEOS - Pretty wild ride, sure wish it was bankrupt.
ReplyDeleteI have previously wrote that in the last CTFC report (which provided futures positions as of April 23), the net long unreportable positions in silver futures dropped to a record low of 2160 contracts and in gold futures to a record low of 100 contracts (going as far back as the CTFC online reporting goes, which is January 2005).
ReplyDeleteBetween April 23 and April 30, gold went up 4% and silver up 6%. What do you think happened to the net long position of small speculators? The net long silver position dropped to 2060 and the net position in gold futures became a NET SHORT position with 1500 contracts!!!
So can the "Common Sense" trade of shorting gold & silver be correct, with all small speculators making out like bandits, en masse, on this trade???
David - those miner ETFs sure do look good for a further bounce. Good luck with them.
DeleteTake a look at the chart of FSLR for the past 18 months. i wouldn't be surprised if you see a similar type move out of those miners (GDXJ, GDX, NUGT) going forward. the setup on the initial bounce looks similar. i'll be watching them for sure.
DeleteCECO - TOF, Perhaps if you're right about the cash coming from customer deposits, then wouldn't that indicate increasing enrollments?
ReplyDeleteCopper - Did you see today's move? Has it ever moved that moch in one day? Man, commercials sure have been adding to their positions. I guess they're sellers now.
ReplyDeleteThey've been covering their silver short too, I'd guess if silver rises they'd begin shorting it again.
Gold isn't a currency anymore in any part of the world I know of, so no I can't call it something it's not. It used to be and now it isn't, just like anything else that ends.
ReplyDeleteBut, why do central banks buy gold at the top and sell it at the bottom? There has to be some reason......??? I'm just trying to understand that, and maybe why they even have tons of gold in vaults, not trying to understand the value of gold anymore, which I can't buy anything with anyway. Honestly, I've come to suspect gold only exists in the central banking system for use as a means of wealth confiscation.
Perhaps the lesson learned from gold is not to trade it if you don't understand it.
DeleteGASS - Opened up then moved down. I see a number of these and guess they should be avoided until the next great day in the market when everything's polar opposite of today.
ReplyDelete"what I've found is after a long basing pattern, the first move almost always gets sold off hard."
ReplyDeleteI get that, I think of it as an C&H. Although, there are stocks that never seem to recover, they just sink to oblivion.
Trident was one of these, they were unable to establish a competitive foothold (They had some really incredible competition in the likes of every major consumer electronics manufacturer fighting for market share) and simply slipped off the edge of the Earth.
TOF, thanks for pointing out FSLR chart to me. It is amazing how many times the previous low was undercut on that chart prior to making a new high. I suppose the correct trading strategy would be to find a stock you like on a fundamental basis, make sure it is making higher lows and higher highs on the daily chart, wait for a "knockout" move below the previous low and THEN for the price to rise above that previous low, enter and place a stop at the previous low.
ReplyDeleteIncidentally, after today's close at $0.45, PNP.TO made a nice cup-n-handle on the daily chart since mid-April. Enter while you can. :) In April, PNP.TO made a bottom at $0.38, which was also its lowest price on the weekly chart during the 2008 crash. After the 2008 bottom, PNP.TO went up more than 10X. This time, the sentiment toward gold/silver among the small futures speculators is much worse than it was in 2008 (as I posted above). So how many X will PNP.TO go up this time? Am I entitled to at least one TOF-style call that actually works out? :)
We all could have had ENPH for under 2 bucks. Just sayin.
ReplyDelete