Going back to the market comments, I see "standard opinion" as the market should do OK the rest of the year, but first we need a pullback to get rid of some of the bullishness. But every pullback of 1% - 2% is getting bought because I think a lot of people (individuals, pension funds and hedge/mutual funds) are underinvested and looking for places to buy.
I do think a lot of stocks have moved up a lot and are extended, so either we do pullback, or people's mindset shifts from the "worry, something bad will happen" to the "ok, things are starting to get better so I should buy". Kind of like those market cycle charts where we shift from relief to optimism. This would increased the valuation people will pay for stocks.
So, I think it is fine to take profits here, especially in stocks that have moved, but I don't think you want to try and time this market and go all-out at this point or you may end up chasing a rising market.
DE - Gonna get whacked today? Their ag group did well, construction lagged.
Farm tractor sales are good.
BB - Makes perfect sense to me, I'm still trying to digest the reason for lat year's EOY swoon, has the catalyst for something like that fully decayed? The numbers seemed good, yet the market sold off.
My impression is you've got a better grasp on the situational realities than I, which is why I ask.
My positive argument for solar involves LED lighting and all the parasitic appliances found in the common household. Not sure how the solar can be implemented in such a way as to shift parasitic appliances off the grid but wouldn't that be the power company version of the USPS syndrome?
Mark - Call your solar guy and tell him they need to find a way to shift parasitic loads off the grid and onto solar. There might need to be an appliance redesign renaissance to make this happen, where the appliance has primary and secondary(parasitic) power feeds.
Toss it at him and see what he says, I expect he's already be working on this.
I'm getting tempted by the miners here as well. Should probably stay away, but some of them are quite tempting. Big risk is if price of gold continues downwards, then the stocks will follow, but could be a good buy time.
Well, maybe you're thinking of the fiscal cliff, or perhaps the supposed capital gains tax increase? Still trying to understand the real reason people sold, it defies logic and thus justifies examination.
Seemed like a fowl mood set in more than anything. Anyway, that turned out to be a huge gift not to be overlooked, and wouldn't be surprised if another such gift weren't right around the corner staring us in the eye.
Plus with the money they are raising selling the US division and doing something with the European insurance operations, they should have the Dutch government paid off soon and say they are committed to reinstating a dividend which will attract buyers.
Good point, I happen to like the Netherlands. I found the people there friendly, quite smart, and have their priorities in the right places, IMO. I am concerned about the impact of global warming may be having, though.
I'm planning an add to my position in the case today's strength does fade for some inexplicable reason.
Netherlands is definitely one of the good countries in Europe. Hard working, responsible government, good education system. Because they are smaller than Germany, they don't get a lot of attraction, but they have a similar economy.
I think CP might be right. Late to recognize it as always, but we should be fading into the gold rallies with inverse tools. Now that that is realized it may mean- go long. LOL
Hey BB - Thanks for replying with your comments about the market / economy. Deep down inside I agree. I think things continue on the mend and the vast majority of the public is still skeptical which is a good thing. I guess I'm thinking shorter term and thinking we may have an opportunity here soon, but looking at YRCW today it makes me fairly doubtful that will happen.
I sold a little CECO and NOK yesterday only to wake up this morning and realize that this was a mistake. Even if I'm right that the market could at least trade sideways for the next several months, if not fall some, the stocks I'm in (primarily CECO and NOK) are so beaten down that I just don't think it makes sense to sell. So I bought back full positions in both at $2.82 and $3.7 this morning.
The thing with this market this year is that any sales of stock (not in the mining sector of course) have been regretted in short order.
Going forward I'm going to continue to focus on stuff in new bull markets that have pulled back (e.g., NOK or FMD in my opinion) or stuff that is so beaten down its hard to resist (e.g., CECO or YRCW previously). One thing I have had my eye on and am waiting for what I think is a good entry point is SID and I also think MBI is going to make another run similar to YRCW.
My initial target on CECO was the most recent highs of $4.20 which coincidentally is just below the amount of net cash they have on the books. I think my cost basis is around $2.35 in my accounts. I'm going to keep holding with an eye toward adding at the 50% or 61.8% retracement level of wherever the current rally ends.
SLV and GDXJ dropped today below the April crash lows. Maybe the 10-year bull run in PMs is really over. Maybe the smart money (close to the government) have sniffed out the decrease in the budget deficit a couple of years ago, and maybe THAT is what's putting pressure on gold/silver. For a while now I've been saying that the main long-term dynamics driving up gold/silver is the increase in the US Debt/GDP ratio, and maybe traders came to expect a certain high rate of increase for this ratio, based on the huge deficits in 2009/2010. But now that the deficits are going down, traders are re-evaluating their expectations and are bringing gold down to earth...
David - That is definitely what people are thinking. The charts said it two years ago. The economy is on the mend and should be that way for a while. However, I do think after a retest of the lows, there should be a rally in gold to 1,530 to 1,560, just based merely on how the S&P traded in 2007/8 and how most parabolic rises trade after they peak. I think this would coincide with a sideways trending or pulling back market.
dudes - check out the chart of the Sensex. Is that not a 6 year consolidation looking to break out in a BIG way? India is in play man. Reminds me a lot of the IYT before it busted loose for a 15 to 20% gain.
FNMA - I called my broker and asked what was going on, the service rep said he didn't know but was hearing a lot of chatter around the office then asked me what the ticker was, so he could take a look at the chart.
I happened to double down on my BYD puts at $14.25 so they are now even money. They expire on Friday though so I'll try to figure out what to do with them.
CP, you have to look at the commodities individually now and evaluate on a supply / demand basis.
I think Gold and Silver are in the worst shape as all that ETF money is coming out and people are using them for sources of income to buy stocks. The gold / sliver stocks are interesting as they are trading as if the metals are already much lower, so at some point should be a buy.
Energy is a tough call as you've got increasing north american supply fighting with increasing China demand. Not sure where it ends up.
Copper is supposedly one of the better base metals as many of the large copper mines are slowing down, but there has been a lot of money going into copper mines which should come on board in the next few years.
Iron Ore and Coal are really calls on China and their demand.
Aluminum is cheap, but demand also increasing, but China is supposedly ramping up.
I am currently keeping some energy stocks as hedges against inflation should the fed lose control of things and prices start to move, plus they are valued cheaply if energy prices hold.
Other than that, I would look elsewhere for stocks. Financials, consumer stocks, industrials all seem better to me than commodities.
"The gold / sliver stocks are interesting as they are trading as if the metals are already much lower, so at some point should be a buy."
Yes, I can see that perspective, however, considering the level of tenacity it wouldn't surprise me if everybody simultaneously heads for the exits?
Aluminum has been in oversupply since prior to the financial crisis, hasn't it? I'd rather own composite manufacturers like HXL, especially if I could wind the clock back just one year.
Do you think maybe the switchover to composites is running out of steam, or will the technology also begin infiltrating the auto industry?
honestly the volume drop is oftentimes a clue that the stock is about to move big. REDF is basically trading sideways as volume drops off a cliff. same thing happened in TZOO and YRCW before both went bananas.
Probably pissing money down the drain here but I decided to take a complete gamble. I bought 400 x NOK $4 calls expiring on Friday at $0.02. My thinking is simple: the stock is at the highs of the day and has already recouped more than half of its losses from yesterday. There is a product launch at Verizon tomorrow so any kind of positive rumors could propel this higher tomorrow and this stock is known for being volatile. It would require a big move tomorrow and Friday but there its possible.
There is still one big catalyst out there with the Nokia Siemens division and the big boys in this stock would probably like nothing better than to float some rumor about an IPO in this division (a la SNE) right before OpEx. If this were to happen I see no reason why the stock wouldn't rally some 20% or so which would make this a massive payoff in percentage terms. Since I only have about $900 at risk (including commissions) I figure this could be a nice risk-reward trade. Could be downside of $900 and upside of $20,000 or so if something crazy happens. We shall see.
Spot gold -31 (-2%)to 1394, spot silver -3% and at a new 52-wk low. GDX currently -4.2%, GDXJ -7.5%. I think they’re running stops and miners are retesting mid-April lows, but of course I have no way of knowing for sure. Alice is back in the cab of her dumpster. Plan to reopen RYPMX at the close.
I wonder who will be silly enough not to sell their existing positions in the miners today, seeing that both SLV and GDXJ have convincingly broke below the mid-April lows... As a consequence, will there be any sellers left for tomorrow?
You've still got that record miner inside buying they talked about in the Globe and Mail a couple of weeks ago. People still have hope for the miners.
When the bull market in metals started back in the early 2000's, the insiders were selling into strength (which was still near the lows). Don Coxe used to say "those who know it best, love it least, because they've been disappointed so many times". That was the fuel for the 12 year bull.
Also David, you have more contrarian, value type guys like me are starting to wonder if the miners are getting to be a buy here. So, perhaps the market is shifting from traders and people who bought into the Peter Schiff / Jim Sinclair "gold is going to $6,000" story the last few years to people who think more about supply /demand fundamentals and price to value.
So just to be clear, I think the precious metals have more downside, but I think some of the precious metals stocks may be getting buyable, but I am going to be cautious and may still not buy for a long time. But at least they are no longer completely off the table for me.
CP, the automakers are looking for big gains in fuel efficiency over the next few years. I think lightweight materials like aluminum are part of their plans.
Going back to the market comments, I see "standard opinion" as the market should do OK the rest of the year, but first we need a pullback to get rid of some of the bullishness. But every pullback of 1% - 2% is getting bought because I think a lot of people (individuals, pension funds and hedge/mutual funds) are underinvested and looking for places to buy.
ReplyDeleteI do think a lot of stocks have moved up a lot and are extended, so either we do pullback, or people's mindset shifts from the "worry, something bad will happen" to the "ok, things are starting to get better so I should buy". Kind of like those market cycle charts where we shift from relief to optimism. This would increased the valuation people will pay for stocks.
So, I think it is fine to take profits here, especially in stocks that have moved, but I don't think you want to try and time this market and go all-out at this point or you may end up chasing a rising market.
I woke up this morning with the '1615 within days, that's my story and I'm sticking to it' refrain on my mind.
ReplyDeleteHere's more support for the "market is not too bullish" theory and that pullbacks continue to be bought:
ReplyDeleteOnly 5 of the 17 strategists that Bloomberg tracks have year end targets for the S&P 500 that are above Tuesday's close of 1,650.
According to Bloomberg, the average strategist recommended allocation to equities is still under 50%.
DE - Gonna get whacked today? Their ag group did well, construction lagged.
ReplyDeleteFarm tractor sales are good.
BB - Makes perfect sense to me, I'm still trying to digest the reason for lat year's EOY swoon, has the catalyst for something like that fully decayed? The numbers seemed good, yet the market sold off.
My impression is you've got a better grasp on the situational realities than I, which is why I ask.
ING - BB, we're getting a bid this morning, yee-haa!
ReplyDelete2nd - Why won't you buy CECO? TOF laid this one out for us, and he's hooked another breakfast trout on the line for us.
DE - Is that a single digit PE now?
ReplyDeleteThey're whooping it up at the SCTY craps table.
ReplyDeleteTSLA too.
DeleteMy positive argument for solar involves LED lighting and all the parasitic appliances found in the common household. Not sure how the solar can be implemented in such a way as to shift parasitic appliances off the grid but wouldn't that be the power company version of the USPS syndrome?
DeleteVELT- Roth lowers PT from 7-6. That's a pretty good return from here.
ReplyDeleteMark - Call your solar guy and tell him they need to find a way to shift parasitic loads off the grid and onto solar. There might need to be an appliance redesign renaissance to make this happen, where the appliance has primary and secondary(parasitic) power feeds.
DeleteToss it at him and see what he says, I expect he's already be working on this.
INTC - Okay, so why'd they sell this one off yesterday just to buy it back today? What a bunch of c$%p.
ReplyDeleteCVRR- Kinda interesting for LT holders.
ReplyDeleteI have a hunch refiners are going to struggle if/as the brent spread narrows. Just a theory.
DeleteGDXJ 750@11.56
ReplyDeleteI'm getting tempted by the miners here as well. Should probably stay away, but some of them are quite tempting. Big risk is if price of gold continues downwards, then the stocks will follow, but could be a good buy time.
Deletenot going to tolerate much more here....just a day trade for me
DeleteOut at 11.30.
DeleteCP, wasn't the year-end selloff last year because of fears about the US government having to come to agreement on something (can't remember exactly).
ReplyDeleteWell, maybe you're thinking of the fiscal cliff, or perhaps the supposed capital gains tax increase? Still trying to understand the real reason people sold, it defies logic and thus justifies examination.
DeleteSeemed like a fowl mood set in more than anything. Anyway, that turned out to be a huge gift not to be overlooked, and wouldn't be surprised if another such gift weren't right around the corner staring us in the eye.
YRCW prints 18.....
ReplyDeleteCECO will also?
Delete19
DeleteNSPH - Does the picture look better or worse since NSPH last traded around $3?
ReplyDeleteTook off 2000 NOK@2.73
ReplyDeleteNorth Korea.
ReplyDeletehttp://www.kitco.com/charts/livegold.html
Careful. They'll be running stops now.
DeleteIf you guys are gonna trade PM's then why aren't you short for the $1000 retest?
DeleteSpot gold 1400.
ReplyDeleteBrandt has some good chart observations on his site, along with potential target areas, I think.
DeleteDamn, they're no longer even commenting on gold at Alice's Restaurant.
DeleteING - Guys, this PE is pretty low. Considering fund managers are looking for places to park money, you must believe this PE won't last long.
ReplyDeletePlus with the money they are raising selling the US division and doing something with the European insurance operations, they should have the Dutch government paid off soon and say they are committed to reinstating a dividend which will attract buyers.
DeleteI will play. Looks good. 1000@8.80 stop 8.60
DeleteGood point, I happen to like the Netherlands. I found the people there friendly, quite smart, and have their priorities in the right places, IMO. I am concerned about the impact of global warming may be having, though.
DeleteI'm planning an add to my position in the case today's strength does fade for some inexplicable reason.
Netherlands is definitely one of the good countries in Europe. Hard working, responsible government, good education system. Because they are smaller than Germany, they don't get a lot of attraction, but they have a similar economy.
DeleteGDXJ @ 11.29. GDX @ 27.91.
ReplyDeleteFade my trade. good call. :)
DeleteI think CP might be right. Late to recognize it as always, but we should be fading into the gold rallies with inverse tools. Now that that is realized it may mean- go long. LOL
DeleteSilver handed me my azz with what appears to have been a series of big fat lies, so naturally I'm highly prejudiced.
DeleteAnd steaming mad too, I might add.
DeleteFNMA - Another +15%
ReplyDeleteI've gotta quit for now. All yesterday's reloads rocked.
ReplyDeleteSCTY.
YRCW TOF ROCKS. Still a ways to go.
CSIQ
Irrational exuberance....it must be sold sooner or later. Probably later.
I feel like the Wizard of Oz after Dorothy lifts off in the balloon without him...."Come back, come back"....
Coal? How about Chinese coal? How about a monster basing chart on lift off?
ReplyDeleteEXTREME volatility.
LLEN
yeah dude that move to $3.60 was an awesome setup. kind of reminds me of the knockout blow in FIG when it was in the $5's.
DeletePull back three years....giant C&H with a long base. Even if it only goes to $8.
DeleteMan, I nibble on 1000 starter position and it takes off 5%....very volatile.
DeleteBTU is green as well, coal is on fire.
DeleteYHOO - Off @ $27.20, I can proudly state I no longer own those 10 shares bought three or four years ago and I can buy a soda with my gains.
ReplyDeleteSo much for my internet dot-gone trades....
Hey BB - Thanks for replying with your comments about the market / economy. Deep down inside I agree. I think things continue on the mend and the vast majority of the public is still skeptical which is a good thing. I guess I'm thinking shorter term and thinking we may have an opportunity here soon, but looking at YRCW today it makes me fairly doubtful that will happen.
ReplyDeleteI sold a little CECO and NOK yesterday only to wake up this morning and realize that this was a mistake. Even if I'm right that the market could at least trade sideways for the next several months, if not fall some, the stocks I'm in (primarily CECO and NOK) are so beaten down that I just don't think it makes sense to sell. So I bought back full positions in both at $2.82 and $3.7 this morning.
The thing with this market this year is that any sales of stock (not in the mining sector of course) have been regretted in short order.
Going forward I'm going to continue to focus on stuff in new bull markets that have pulled back (e.g., NOK or FMD in my opinion) or stuff that is so beaten down its hard to resist (e.g., CECO or YRCW previously). One thing I have had my eye on and am waiting for what I think is a good entry point is SID and I also think MBI is going to make another run similar to YRCW.
UGA - Down again today, this I believe relates to the narrowing Brent spread.
ReplyDeleteDo you recall Romney's pathetic political spin concerning this subject and how he had a plan to lower gasoline prices if elected? What a dirtbag.
My initial target on CECO was the most recent highs of $4.20 which coincidentally is just below the amount of net cash they have on the books. I think my cost basis is around $2.35 in my accounts. I'm going to keep holding with an eye toward adding at the 50% or 61.8% retracement level of wherever the current rally ends.
ReplyDeleteSLV and GDXJ dropped today below the April crash lows. Maybe the 10-year bull run in PMs is really over. Maybe the smart money (close to the government) have sniffed out the decrease in the budget deficit a couple of years ago, and maybe THAT is what's putting pressure on gold/silver. For a while now I've been saying that the main long-term dynamics driving up gold/silver is the increase in the US Debt/GDP ratio, and maybe traders came to expect a certain high rate of increase for this ratio, based on the huge deficits in 2009/2010. But now that the deficits are going down, traders are re-evaluating their expectations and are bringing gold down to earth...
ReplyDeleteDavid - That is definitely what people are thinking. The charts said it two years ago. The economy is on the mend and should be that way for a while. However, I do think after a retest of the lows, there should be a rally in gold to 1,530 to 1,560, just based merely on how the S&P traded in 2007/8 and how most parabolic rises trade after they peak. I think this would coincide with a sideways trending or pulling back market.
Deletedudes - check out the chart of the Sensex. Is that not a 6 year consolidation looking to break out in a BIG way? India is in play man. Reminds me a lot of the IYT before it busted loose for a 15 to 20% gain.
ReplyDeleteS&P is now a decent amount above it's upper BB. Market has not fared well after this happens for the past 3 years:
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$SPX&p=W&b=3&g=0&id=p54448894678
And grossly underperforming today, S&P up a scant 8pts. A full 10pts above upper BB
DeleteThree days in a row VIX and SPX are both positive, that's kinda special.
DeleteVIX was actually rising for most of the latter half of the 90's when the S&P was rising so its not unheard of.
DeleteGGB/SID - Wow, the pounding has been pretty severe. Wonder what's behind it, maybe a shift from China over to Mongolian or African mining industry?
ReplyDeleteGranted commodities are reflecting the slowdown in global demand but the rout is bound to reverse or is oversupply the new normal?
FNMA - I called my broker and asked what was going on, the service rep said he didn't know but was hearing a lot of chatter around the office then asked me what the ticker was, so he could take a look at the chart.
ReplyDeleteFinancials - Note the strength, is it b/c they bought every damn thing on earth right at firesale price lows using free money?
ReplyDeleteI happened to double down on my BYD puts at $14.25 so they are now even money. They expire on Friday though so I'll try to figure out what to do with them.
ReplyDeleteSold the BYD puts at $0.35. Purchase price was $0.288 so not horrible. Probably made like $300 on $2,500 trade. Was down 60% at one point.
Delete$BSE - 11% gain in one month, that's some scary volatility.
ReplyDeleteCP, you have to look at the commodities individually now and evaluate on a supply / demand basis.
ReplyDeleteI think Gold and Silver are in the worst shape as all that ETF money is coming out and people are using them for sources of income to buy stocks. The gold / sliver stocks are interesting as they are trading as if the metals are already much lower, so at some point should be a buy.
Energy is a tough call as you've got increasing north american supply fighting with increasing China demand. Not sure where it ends up.
Copper is supposedly one of the better base metals as many of the large copper mines are slowing down, but there has been a lot of money going into copper mines which should come on board in the next few years.
Iron Ore and Coal are really calls on China and their demand.
Aluminum is cheap, but demand also increasing, but China is supposedly ramping up.
I am currently keeping some energy stocks as hedges against inflation should the fed lose control of things and prices start to move, plus they are valued cheaply if energy prices hold.
Other than that, I would look elsewhere for stocks. Financials, consumer stocks, industrials all seem better to me than commodities.
"The gold / sliver stocks are interesting as they are trading as if the metals are already much lower, so at some point should be a buy."
DeleteYes, I can see that perspective, however, considering the level of tenacity it wouldn't surprise me if everybody simultaneously heads for the exits?
Aluminum has been in oversupply since prior to the financial crisis, hasn't it? I'd rather own composite manufacturers like HXL, especially if I could wind the clock back just one year.
Do you think maybe the switchover to composites is running out of steam, or will the technology also begin infiltrating the auto industry?
Been watching REDF. No volume
ReplyDeleteThe question is: will the momo boys hop back in on this one> If they do it could hit $6 in a heart beat.
Delete"in a heart beat."
DeleteMaybe that's the clue, volume literally drops off a cliff?
honestly the volume drop is oftentimes a clue that the stock is about to move big. REDF is basically trading sideways as volume drops off a cliff. same thing happened in TZOO and YRCW before both went bananas.
DeleteProbably pissing money down the drain here but I decided to take a complete gamble. I bought 400 x NOK $4 calls expiring on Friday at $0.02. My thinking is simple: the stock is at the highs of the day and has already recouped more than half of its losses from yesterday. There is a product launch at Verizon tomorrow so any kind of positive rumors could propel this higher tomorrow and this stock is known for being volatile. It would require a big move tomorrow and Friday but there its possible.
ReplyDeleteThere is still one big catalyst out there with the Nokia Siemens division and the big boys in this stock would probably like nothing better than to float some rumor about an IPO in this division (a la SNE) right before OpEx. If this were to happen I see no reason why the stock wouldn't rally some 20% or so which would make this a massive payoff in percentage terms. Since I only have about $900 at risk (including commissions) I figure this could be a nice risk-reward trade. Could be downside of $900 and upside of $20,000 or so if something crazy happens. We shall see.
FNMA - Now +22%, not expecting any profit taking into close.
ReplyDeleteOkay, maybe a little profit taking as the wing-wax nearly melted.
DeleteSpot gold -31 (-2%)to 1394, spot silver -3% and at a new 52-wk low. GDX currently -4.2%, GDXJ -7.5%. I think they’re running stops and miners are retesting mid-April lows, but of course I have no way of knowing for sure. Alice is back in the cab of her dumpster. Plan to reopen RYPMX at the close.
ReplyDeleteI'm sticking with the sea bass for now.
DeleteI wonder who will be silly enough not to sell their existing positions in the miners today, seeing that both SLV and GDXJ have convincingly broke below the mid-April lows... As a consequence, will there be any sellers left for tomorrow?
ReplyDeleteOne phenomenon that does seem recurring is new lows typically lead to a relief rally response of some magnitude.
DeleteYou've still got that record miner inside buying they talked about in the Globe and Mail a couple of weeks ago. People still have hope for the miners.
DeleteWhen the bull market in metals started back in the early 2000's, the insiders were selling into strength (which was still near the lows). Don Coxe used to say "those who know it best, love it least, because they've been disappointed so many times". That was the fuel for the 12 year bull.
Also David, you have more contrarian, value type guys like me are starting to wonder if the miners are getting to be a buy here. So, perhaps the market is shifting from traders and people who bought into the Peter Schiff / Jim Sinclair "gold is going to $6,000" story the last few years to people who think more about supply /demand fundamentals and price to value.
DeleteSo just to be clear, I think the precious metals have more downside, but I think some of the precious metals stocks may be getting buyable, but I am going to be cautious and may still not buy for a long time. But at least they are no longer completely off the table for me.
DeleteCP, the automakers are looking for big gains in fuel efficiency over the next few years. I think lightweight materials like aluminum are part of their plans.
ReplyDeleteWow, this discussion of automotive materials just prompted me to look at the SMP chart....
DeleteREDF - Speaking of trying to nail a big move, BB's can provide a clue as well, and REDF weekly chart seems to have compression of the BB's?
ReplyDeleteThe daily chart already triggered off BB compression.
So why havn't the guru scanner bots been pouncing on this, or have they and my ears are too full of wax to hear the shouts?
PAL - $1, as anticipated.
ReplyDeletePLG - Here's a miner for ya.
Deletenew post
ReplyDeletePAL is a very sick stock. FD: I own RBY which is also ailing.
ReplyDelete