Monday, May 20, 2013

05/20/13 Mr. Toad's Wild Ride

http://www.kitco.com/charts/livesilver.html None of us could have predicted the above, but neither are any of us surprised. So we could have bought Friday's selloff and made money today (after a sleepless night). I'm OK with no trades today.

106 comments:

  1. I added more FMD at $1.25. I also bought 78 x ANR $7 Calls expiring this Friday at 0.229615 avg price. If the bottom is truly in on these then I wouldn't be surprised to see a big rally for the next several days and certainly $9 isn't out of the realm of possibility by Friday. Who knows but it was a small bet on a potential big payoff.

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  2. MUX - Hip-hip-hooray, a 16%gain today. Okay, so what's the rest of the week gonna look like, eh?

    Obviously something changed, like someone back in the prehistoric age stepped on a snail or something.....

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  3. Wonder what Brandt's mystery chart could be?

    http://peterlbrandt.com/my-choice-for-the-next-major-bull-market-target-of-17000-per-futures-contract/

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  4. 3000more fmd@1.24

    100 shares...lol (partial execution)redf @3.38

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  5. NOAH +$1.15 for 9.92% increase. It was up $2.59 at its peak this morn. And me without a single share.

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  6. The hedge funds were selling GLD into today's rally at an increasing pace. Recently, GLD was shedding 5 tonnes of gold per day. Today, it shed 7 tonnes. I wonder what will keep the pressure on POG after the physical buyers in China and India buy all the gold from GLD...

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    1. Are the Chinese and Indians buying gold b/c they suspect their currencies will become weaker going forward? I believe Indian people just happen to like gold, for traditional and religious reasons?

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  7. GDX/ GDXJ rallied on 2x average volume. So now we have a 'floor.' No point in 'chasing,' so I'll wait for a (possible) pullback or retest.

    In the meantime, I have RYGBX (Rydex 1.2x Government Long Bond) and TLT on the watchlist for entries.

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  8. I assume you had a good day, David. Hope the rally in miners continues in typical fashion, leaving potential buyers behind.

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    1. I still have 500 contracts of October AUMN $2.50 calls which I bought mid-April at $0.10. If AUMN rises to $2.50 at least a month before October OpEx, I assume they will be worth more than $0.10...

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    2. So you own options on 50,000 shares. Here's to the calls bidding $10 by Oktoberfest. That should be worth a few pints in celebration.

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    3. Think that's impossible? Heck, we all thought AUMN @ 1.50 was impossible!

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    4. I am pretty sure that if those calls double, you'll be urging me to take profits. :)

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    5. Actually, this time I won't be. Anyone who's been through that kind of drawdown without bailing needs to play his hand through to the end. At this point, I would. If miners continue to decline, then a ton of smart money will have been not only wrong, but dead wrong.

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    6. In fact, the more serious 'risk' right now is that you sell out near the bottom and get left permanently behind after several more rallies like the one we saw today. That might depress you 'twice over' to the point where I would recommend you just stick with the position.

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    7. There's always a 'point of no return,' beyond which it's better to stay the course. Trying to reverse the position will likely cause more harm, either through further losses or compounded emotional stress.

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  9. Since 2006, Price/NAV for PNP.TO oscillated between 0.48 and 2.42. As of April 30, their NAV was $1.00 and their share price was $0.43. I wish they would just close their fund and pay me $1 for each share I own (talk about margin of safety built in when buying PNP.TO now... My last addition was 9K shares at $0.41...

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  10. As much as contrarian analysis might have us think the indexes continue to climb unchallenged, I have to weigh in with a counterpoint. I've been trading too long not to think a sharp spike down lies around the corner.

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    Replies
    1. Jessie pointed out in yesterday's report that $SOX is outside it's upper Bollinger.

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  11. Tuesdays have been rally days, wonder what tomorrow brings?

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  12. I am using stops on any new trades and I hate to pass some of these up cuz what if we are just in the early phase of a parabolic rally? I've been waiting 3 months for a pullback. It could happen tomorrow but I think I'll keep going with the scan setups for now.

    A few names we know on the AbvGL scan for buy setups
    BYD Slow STO at 14.56, wait for a move above 20
    EPHE, Slow STO at 7.11, wait for a move above 13.11 but then I don't think this is the best setup.
    FOR, Slow STO at 17.25, wait for a move above 20
    KBH, Slow STO at 14.95, ditto
    RKT, Slow STO at 17.03, ditto
    SYNA, Slow STO at 14.99, ditto
    THC, was on the watchlist today, Slow STO now at 10.19, wait for a move above 16.19, this is an ugly chart though. Looks a bit double toppish.
    YHOO, Slow STO at 19, wait for a move above 20




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    1. My favorite picks from the above list are BYD and KBH. BYD actually looks like a good Landry pullback play so just wait for a trade above yesterday's high of 13.34

      On KBY, I would use the Slow STO trigger.

      I probably won't get a chance too look tomorrow anywhere but at least I have a short list for longs. Too tired to check for shorts.

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    2. BAH doesn't show up in these scans?

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  13. Folks, I did overlook one interesting thing in last Friday's COT report: the net short position for commercials in gold futures dropped to yet another all-time low of 27K contracts, down from 38K contracts in the previous report. At this rate, commercials will become net long in a couple of weeks -- wouldn't it be something? :) Instead of hedging their future production, they will leverage it up. :))

    I don't think it is wise to bet against such an optimism about the future price of gold on the part of commercials at this point...

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    Replies
    1. I'm wondering if Soros has been loading up again?

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  14. I just had a long conversation with the investor relations group over at FMD...basically the capital market for securitization deals is much more improved but it is still not quite there in terms of getting them back to where they used to be. For example, right now SLM is doing a deal that is 86% covered by outside funding sources. This is significantly better than just a few months ago but it is still not close enough to where it used to be. They used to get oversubscribed on deals – I.e., greater than par so the excess capital would be realized as a gain on sale and they were doing these deals every year which would generate excess income for them. Those deals are probably still another year or two away. FMD could be a slow mover going up until that point. This market has surprised me (e.g., YRCW at $24!) but I don't see this being a huge winner just yet. Will take a while and could be a double or so until the securitization market starts getting close to par.

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    1. I guess it really just comes down to monitoring that market. It could change quickly if the consensus is that the jobs market is solid enough and if bigger money (hedge funds / pe / etc) come to the conclusion that the yield from these deals is attractive when compared to other investing opportunities.

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    2. It does help that the pool of loans that FMD has gathered has 750+ FICO scores on average and the bulk of them are co-signed.

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    3. Volume might hold the clue we're seeking?

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    4. A close of $1.25 or better would help here.

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  15. GDX off @ 27.4x, SLW off @ 22.5x. Yeah, I know I'm posting the sales a little late. But I'm more interested in profits than posting. Ha!

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  16. "Spread's Dead, Baby" - "“Melt-ups” remain par for the course in European credit Sluggish growth, low yields and an active ECB mean that European credit is more likely to “melt-up” than melt-down at present. High-grade spreads have just tightened by 25bp in the last month and sub financial and sovereign CDS have repriced materially tighter over the last few days. For now, assets with yield are the winners and we remain overweight both high-grade and high-yield credit. But when central banks change their rhetoric from “whatever it takes” to “job done”, we think the tightening cycle in credit spreads could come abruptly to an end."

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  17. ----ers are selling off again.

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  18. Off the PEIX @ 4.42 from a cost adjusted pre reverse split level of 4.28 for a few bucks....feel lucky about it

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    1. And of course it immediately cruises to 5.15

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    2. Wonder if $5 wasn't the reverse split goal, so that brokers can dump onto their customers?

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    3. No idea, but like I said the reverse split biz is nasty and I want no part of it. Thought it might be a tricky way to play the ag sector for a while till the reverse split came about.

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  19. Bought the 1000 REDF @ 3.28 I tried to fill yesterday so that worked out for now.

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  20. HII - This might be good for some downside:

    "Huntington Ingalls May Be The Safest Bet In The Defense Sector at Forbes"

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  21. Sold the ANR calls expiring on Friday and the ANR stock. Might switch to WLT since I think that one may have some more upside. Watching right now.

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    1. Bought some WLT at $20.4. I'm thinking that this could potentially run higher than ANR only because I get this impression that more people are following ANR and playing that one. I also like the insider buying on WLT and think the entire sector is ready. It's just a hunch but I think enough people have gotten thrown off the trade for the past 5 months as they tried to call the bottom. We shall see though. It would help if Nat Gas rips back up to $4.40.

      I also bought $1,500 worth of $22.50 calls expiring on Friday at $0.14. Again, total crap shoot but if this sector really rallies there is no reason why WLT couldn't get to $25 by Friday.

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    2. Here's the other thing about WLT - look at the returns YTD even after the mini rally:

      BTU -18.48%
      ACI -21.8%
      ANR -24.2%
      WLT -43.1%

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    3. Holy crap, those coals do look like they're moving.....

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    4. I like the play. WLT @ 20.38. Defining a stop is iffy on this. Almost though about buy stop above high, but elected to jump in here.

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  22. Kiss of death?

    Goldman Sees 'Gradual Rotation' Into Stocks

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  23. AAPL - What a waste of time, sheesh, the greedy federal government wonders why AAPL takes advantage of anti-US employment tax loopholes.

    They're going to have a tough time implementing a double tax, but that's what they're trying to say they want.

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  24. DWAHY - Ha, a Japanese home builder.

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  25. Added more WLT at $20.1

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    1. whew. no one said this trade would be easy. adding more at $19.96

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    2. holy shit that was a crash. I added more at $19.4. Man now I know why I avoided this sector!

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    3. Falling knife huh? Wow. I added more at $19.2 but now I'm worried the market is set up to tank tomorrow. Wow what a move. Avg is now $19.9

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    4. Not a fun ride right there. I started my position to large and set a firm stop at 19 and it triggered. Ouch.

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    5. Well I built up too big of a position too. About 30% of the port now. Avg is $19.6 or $19.7. Jeez. That just seemed like panic selling by the day traders that were riding this. Bigger picture look at the volume on the monthly chart for this. All time highs the past two months.

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    6. I haven't taken a beating like that since I played the 3X's ETF in the height of the 2008 crash. Honestly, I felt panicked myself and needed to reduce exposure to sleep tonight. I usually can avoid emotional trades.....hope I don't see a 22 print tomorrow out of the gate on WLT.

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  26. Let ECA and ANR both go a little while ago. The mkt sure is the little train that can go.

    Man YRCW, who knew just had to add up 100%, crazy action this mkt.

    Went boogie boarding the other, the first swell of the year had to be 6-10 feet with sets over 12, tough on the old man but great to be in the ocean.

    GL all.

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    1. And speaking of the Doors, Ray passed away.

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    2. It's strange how I referenced Manzarek just two days ago in a post about Pittsburgh.

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  27. Taking a break from Mr. Toad's and opening a position in the yen. FXY @ 95.51...

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  28. My run in with WLT talked me into offsetting some losses with nicely profitable sales in CECO (half), ING (all) and also reduced FMD to half up a penny or two.

    Got an weird feeling that risk off is the way to play tomorrow, so I reduced it a fair amount after todays piss pounding I took in an hour. :)

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  29. Coal volume - Sure looks like accumulation, how does it get whacked so quickly like that?

    Anyway, late day always seem to be the time to trade, smart money is patient money?

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  30. ING - This one opened weak probably b/c it sold off a bit in Europe. (INGA.AS)

    An aside:

    "Stocks rose on Tuesday, with the Dow and the S&P 500 closing at new all-time highs as comments from Federal Reserve officials eased some concerns that the central bank could start reducing its stimulus program."

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    1. Took mine off today. Made a nice profit on it. Thanks for putting on my screen CP. May add back if we get another dip.

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    2. Yeah, might've been a good idea since today was bullish Tuesday again and it didn't move. Did better here than Europe, though.

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  31. Psycho Killer - Better run, run, run away......

    That crazy robot is still long.

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  32. NSPH had a terrific day, second one in row. I'm hoping it never goes back to fill that gap from the Hitachi news.

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    1. I bet Japanese nationals are buying it.

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    2. BTW, the last letter "i" in Hitachi is silent.

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  33. Catching that six blade knife:

    Your six blade knife-do anything for you
    You can take away my mind like you take away the top of a tin
    When you come up from behind and lay it down cold on my skin
    Took a stone from my soul when I was lame

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  34. I got a partial copy of Bernanke's testimony for tomorrow.

    Doing his best Mr. T impersonation by wearing gold chains (Bernanke knows value when he sees it) and sporting a mohawk it says "I pity the fool who thinks I'm backing off the QE pedal"

    Famous Mr. T quote (unverified of course)- "I believe in the Golden Rule — The Man with the Gold . . . Rules."

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    1. Hmm, someone said years ago that gold always gets whacked when Mr. T makes appearances.

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    2. It would be a pretty mean feat for Bernanke to sport a Mohawk.

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  35. Looks like physical buyers of gold took a break today, waiting for the paper gold sellers to bring the price down to better levels: 8 tonnes of gold were sold by GLD today (more than yesterday!). If I were a large physical buyer, I would just stand aside and wait to see how low the price of gold will get when the exodus from GLD ends. THEN I would start buying...

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  36. WLT - TOF, you did pick the price leader! ;(

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    1. haha I know right! been reading up more on WLT...man this sure as hell looks like a big time long term winner here. i like that it's basically a pure play on metallurgical coal (i.e., steel input) instead of coal used in power plants. i also like that it's paying a 2.6% dividend which is better than nothing. insiders buying in X as well makes this interesting indeed.

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    2. Keep in mind, the steel industry is supposedly switching to natty, US first? Dunno if they can find natty reserves in China and Korea(PKX has modern steel plant), etc., US steel producers (and aluminum) might kick some butt with cheap natty.

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    3. And concerning insider buying, I like to look at how much they actually buy and own, just $20k~$30k doesn't impress me much.

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  37. No trades today, just busy working.

    For tomorrow, using AbvGL scan
    EPHE, Slow STO at 19.9
    IPAR, Slow STO at 14.08
    MDSO, Slow STO at 15.35, could also be a TKO with a buy trigger around 70.75
    THC, Slow STO at 13.34

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  38. Forget Bean Town TOF...

    http://www.bloomberg.com/news/2013-05-21/housing-market-cooling-if-you-consider-going-from-212-f-to-210-f-cooling.html

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    1. we were just looking at what we can buy in the Boston area. believe me...it's a lot more affordable than here. for $450k in San Diego i basically can afford a 2 bedroom condo in an average location, no yard, and solid $300 to $500 a month HOA fees. yippee.

      here are some around Massachusetts:

      http://www.redfin.com/MA/Scituate/156-Country-Way-02066/home/16436213

      http://www.redfin.com/MA/Marlborough/112-Stearns-Rd-01752/home/11620138

      http://www.redfin.com/MA/Marlborough/21-Thompson-Dr-01752/home/11626975

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    2. Those come with snow bro. You know, the cold white chit that falls out of the sky from time to time...

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    3. oh shit. hmmm. forgot about that.

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  39. ARII - I had this on the list to go long earlier this year. Now I'm waiting for a bollinger band squeeze which would take another 2-4 days I think. I would take a smaller position in the direction of the breakout or maybe wait for a breakout, pullback, then take the next breakout.

    http://stockcharts.com/h-sc/ui?s=ARII&p=D&b=5&g=0&id=p91398270273&a=303554761

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  40. GASL - This thing's been firing on all eight.

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  41. Net operating loss (NOL), these losses are tax deductable for a number of years, wonder what YRCW's tax liability reductions are, from their NOL's?

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  42. "Keep in mind, the steel industry is supposedly switching to natty, US first? Dunno if they can find natty reserves in China and Korea(PKX has modern steel plant), etc., US steel producers (and aluminum) might kick some butt with cheap natty."

    I wonder how much is priced in. Most fgn countries that are large consumers of coal have nat gas prices in the double digits. Also US prices are significantly higher than this time last year. It's all about input costs for these steel companies.


    "And concerning insider buying, I like to look at how much they actually buy and own, just $20k~$30k doesn't impress me much."

    Here are the WLT insider purchases:
    http://finance.yahoo.com/q/it?s=WLT+Insider+Transactions

    Looks like around $2.1 Million

    Here are the X insider purchases:
    http://finance.yahoo.com/q/it?s=x&ql=1

    Looks like around $1.6 million.

    Both are pretty substantial, no?

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    Replies
    1. Not too bad I guess, AGCO insiders had $50m tied up at one time, I think.

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  43. TOF- Do the REDF #'s bother you?

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