Friday, October 11, 2013
10/11/13 The Week From Hell
I'm referring to the week of 10/14/13. So sayeth the prophet who resides at the corner of 2nd Ave and 6th Sense.
(a) The market needs a little R&R. A 400-point rally that has investors back to thinking new highs just doesn't sound kosher.
(b) Gold? Sold. And will be sold harder. After getting burned maybe thirty times in the past 2 years I don't foresee buyers lining up for another 'Kick me' sticker. But that doesn't mean we can't trade the thirty-first dead cat bounce!
Enjoy the weekend, guys.
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Really, all that happened the last couple of weeks is risk went up and then down and so did the market.
ReplyDeleteSounds like they are making progress on this shutdown, so next week, the bounceback due to the resolution will be in the market and focus will be back on earnings, which I think will be pretty good, but not great.
Looks like Dow Futures were up another 30 points after the market close based on news on the shutdown.
ReplyDeleteMy prediction (more of a guess really) is we get a deal, it opens higher Monday, then sells off for a couple of days and than ramps solidly into year-end.
EOG/BHI - ?
ReplyDeletehttp://www.rdmag.com/news/2013/05/new-technology-propels-%E2%80%9Cold-energy%E2%80%9D-boom
Big Irving, The 142nd Fastest Gun In The West:
ReplyDeletehttp://www.downloads.nl/cgi-bin/mp3get.cgi?id=fa53f8b9ad2fe2c48de6fda7f8629cd1&n=1
Any of you guys follow IACI? Looks really cheap on cash flow and EPS basis.
ReplyDeleteI still like bonds. IMO, bond traders called bull---- on Thursday's rally: http://finance.yahoo.com/echarts?s=tlt#symbol=tlt;range=5d;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined; Why would I trust falling bond yields over rising stock prices? As previously pointed out, the bond market is a Rhodes Scholar> three times the size of the stock market, and more intelligent.
ReplyDeleteI don't know man. I think it's too soon to look into a 2 day reaction. The bond market was calling bullsh*t to the stock market rally from June 2009 when the S&P was at 900 until the S&P hit 1,400 eighteen months ago. Then it reversed course after realizing the stock market might be right...at least that's my take on things.
Deletehaving said that, i think we set up like this: monday big drop...to 1,684. then we rally to 1,800 where we top for a while. maybe 1.5 years.
Deletehttp://www.marketwatch.com/story/house-republican-talks-with-obama-stall-2013-10-12
ReplyDeleteWatch for a 'last minute' deal Sunday night around 6 pm in Washington.
The Perfect Game
ReplyDeleteWe lost, 3-1. That took nothing away from a game where everything came together for our team. An away game in Watsonville against a second-place club. The players were well-matched, and it could have gone either way into the final minutes. Aside from points, our boys dominated both halves> passing, ball-handling, speed, and goal attempts (our leading scorer actually took 6 or 7 clean shots that just missed the mark). It was the first time we've seen them play like pros. Tension ran high, with spectators (mostly friends and family) on their feet in the bleachers the entire game. Plenty of drama, with excellent breakaways, shoulder-to-shoulder match-ups, and two yellow flags. I would almost say it's the most exciting game I've watched, CYSA or pro> it was easy to forget the players were all under 12. The big guy (no points today) lofted a beautifully placed penalty kick above the heads of opponents only to have it batted away at the last moment by the keeper. (It was his second intense game of the day. He'd played earlier for AYSO closer to home, where he notched two goals in a 5-2 win. One where the ref came up afterwards to say, 'Nice game, 22. I guess I'll always take a beating with you.')
Cool!...Yep, that is about the age where everything starts to click and watching the games get a whole lot more fun.
DeleteLet It Be: A Novel Approach to Treating Alzheimer's
ReplyDeletehttp://blogs.marketwatch.com/health-exchange/2013/10/10/chemical-discovery-promises-a-simple-treatment-for-alzheimers/
It's amazing how often an idea for a cure comes in from left field. Excerpt:
'A pill to treat Alzheimer’s could arrive within a generation, after scientists discovered a chemical that stops the debilitating brain disease in its tracks.
'In trials with mice, those left untreated had the memory and movement problems caused by dead cells, while those given the compound didn’t lose any brain tissue, scientists from the U.K.’s Medical Research Council said.
'Abnormal proteins (prions) are at the bottom of many diseases that see neurons waste away. They spark a defensive reaction from the body that ends up killing off brain cells. Instead of trying to fix the proteins, the MRC scientists turned off the defenses using a chemical delivered by mouth, they said in a study published Wednesday.
'The news is exciting experts, who believe the compound could be used to develop simple-to-take medicines for a range of conditions, including multiple sclerosis and Parkinson’s. While these aren’t the same as the prion disease in the study mice, they do see neurons die off in a similar way.
'“This finding, I suspect, will be judged by history as a turning point in the search for medicines to control and prevent Alzheimer’s disease,” Professor Roger Morris of King’s College London said, according to media reports.'
Let me know if any of you figure out a way to bet on these guys.
DeleteIs it a compound extracted from blowfish livers? (Kidding!)
DeleteNFLX recommendation of the week: 'Heat Wave.' A French film that takes its time revealing the details of four lives that intersect one day to create a tragic ending.
ReplyDeletetof> Your call for 1684 has already arrived.
ReplyDeleteit stalls there. anyone not on board long will regret it in a week or so. then they will chase at the top.
DeleteNLY/CCL - Still holding these. Amazingly, CCL is holding up well so far today. Waiting for the unexpected, hopefully I recognize it if it does occur.
ReplyDeletehttp://www.cnbc.com/id/101103581
ReplyDeleteMOG would agree with this.
How do we play that?
DeleteANGO - Please don't run away!...........
ReplyDeleteShould we short PM's, especially gold?
ReplyDeleteI think it is too event driven to know. If you get a fiscally tight solution to the government crisis, it goes down. If you get one which doesn't address the debt, you could see a bounce. Longer term, I still think fundamentals are hard to know, but I would lean towards down.
DeleteGood plan, maybe we get a bounce to fade!
DeleteAny of you guys follow REGI? This one keeps coming up on my screens. They're heavy into alt energy / biofuels. While the EPA may be reducing their ethanol mandate, I don't think it will have that much of an impact on them and from the sounds of it the mandate reduction, if passed, would be fairly small. I think this pullback is a buying opportunity. Cash flow and earnings are pretty impressive for a $400 Million company.
ReplyDeleteInsider selling - Seems like I'm picking up on insider selling activity as we move into this Q's earnings reporting season, is it possible this Q might be a little on the soft side? Considering AA estimates were already analyst-softened from 6% growth to 3%????
ReplyDeleteNot sayin' we're doomed, just this Q may be a little softer than the market has already priced?
AGO - " 12:26PM Puerto Rico’s Revenue Collections Exceed Estimates"
ReplyDeleteThis might be helping...
CCL - "Six-year-old drowns aboard Carnival Cruise ship Reuters"
ReplyDeleteAUMN - Aren't those frog legs ready by now? Sheesh! :(
ReplyDeleteI was own for most of the day doing stuff around the house. I bought some of that FU stock at $6.1799 avg...unfortunately not enough because I didn't trust it. I don't know if you guys remember me telling you about it a while ago but it used to trade under the symbol WZE. They were in the middle of acquiring a company in China that was basically the Redbox of China. Well now they're trying to get into video streaming. Obviously with Netflix going nuts it's going to get some sympathy. It is a profitable company and will do around $0.50 or so fully diluted this year. They have a large amount of dilution coming through which makes the current per share EPS higher than diluted figures. I would use about 40 Million shares outstanding, roughly. The company estimated Net Income of about $20 Million this year. I think the market will get a little crazy over the valuation and trade it up to 30 to 40X or $15 to $20/share. I don't have a huge position...about 15%.
ReplyDeleteI also bought a little PME today at $2.36. It's a commercial fishing company in China doing around $1.20 EPS run rate. They have an enormous cash balance and it trades at about 0.40 times book.
I'm also holding on to PNRA, DATE, PEIX, GPRC, and AA.
sorry...out not own...
DeleteI can't blame you for being cautious. I wouldn't trust a company that allows itself to be assigned the ticker symbol FU.
DeleteI meant to post the below earlier, but got called away around 1230:
ReplyDelete(a) The market sold off overnight in the form of futures, started to recover at the open, and the DJIA is now positive (+70).
(b) Gold sold off overnight, only to reverse direction at the London open, and is now +9. GDX (mining ETF) is treading water.
(c) The long bond is currently off -0.9%.
(d) I’m tempted to buy RYGBX (bonds) at the close. What’s stopping me? The bond market is closed for Columbus Day, and I don’t trust the folks driving bond prices today. I’m also unclear how Rydex achieves a 1.2x leverage on the fund; if via derivatives, then I’m even less sure how the holiday will affect the closing price. It looks like a buying opportunity, but I’d hate to place an order that fills +1% higher than expected due to the holiday.
Note also that US Treasurys may trade unpredictably, as (i) ‘safe haven’ demand will be counterbalanced by (ii) the risk of default of those very securities. The right trade here may actually be foreign bonds (Germany, Norway, New Zealand, Australia).
DeleteAnd WTF> RYGBX closed October 14 at 14.45, no change from the October 11 close. That's the kind of thing that would have ticked me off had I taken a position.
DeleteNice call re 1684, tof. And you made the call at a time when I wouldn't have believed it.
ReplyDeleteFor some reason, I have no interest in being long right now.
DeleteUnbelievable 24-hr roundtrip in metals: http://www.kitco.com/charts/livesilver.html
ReplyDeleteNo rest for the weary traveler: http://www.kitco.com/charts/livegold.html It's starting all over again in Hong Kong.
Delete2nd,
ReplyDeleteIf you are interested in bonds (I'm not as I think rates are heading higher across the spectrum), you might take a look at the closed-end municipal bond funds as they are trading at the high end of their discount range. I haven't looked very much, but some suggested ones are : $NAN $VMO $NRK
http://www.cefa.com/ is a good source of info.
If bonds do go, you get the price appreciation plus the kicker of the closing the discount.
FU - It's gotta run for at least a few days, doesn't it? Isn't that usually how these moves work?
ReplyDeleteSold 1/3 of it pre market at $7.1
DeleteSold the rest at $7
Deleteshit bad move
DeleteHey, at least you made something.
DeleteI bought some CCCR this morning at $9.599. I really like their business model - they do small business lending and the founder is a former Chinese central banker. They are the first public company in this space right now. They are trading at around 12X earnings and will be using the funds they raised in their recent IPO to increase lending. China has started promoting micro financing to shift lending away from state owned banks as a means of reducing risk in their banking system. I think this is a potential longer term hold as I think it could become a billion dollar business (vs sub $100 million now).
ReplyDeleteThe other thing I like about this is they are down 50% from the IPO highs.
DeleteLove the chart, although it's obviously a short time frame.
DeleteWow, even BORN is playing along.
ReplyDeleteSeems like the market has priced in an CR, so not expecting any upside when it passes aside from a brief blip?
ReplyDeleteI've seen some crazy ---- in silver prices, but the last 24 hours would have required a trader to stay awake the entire time.
ReplyDeletehttp://www.kitco.com/charts/livesilver.html
Right. I'm still trying to comprehend the fascination, myself.
DeleteIf you thought the Dick Tracy Watch was a good one, how about x-ray vision Superman style?
ReplyDeletehttp://www.rdmag.com/news/2013/10/new-x-ray-vision-can-reveal-internal-structure-objects
OUTR - Quite an island reversal, this one was......
ReplyDeleteJCP @ 7.64.
ReplyDeleteOff 7.61. It's already starting to feel like 'hope.'
DeleteNice, 2nd.
DeleteWill US listed Chinese companies be delisted?
ReplyDeletehttp://www.chinaaccountingblog.com/weblog/pcaob-deal-with-hong-kong.html
Good charts on gold and being very oversold, but after such a long bull, may last a while longer:
ReplyDeletehttp://theshortsideoflong.blogspot.ca/2013/10/gold-most-oversold-since-1985.html
Might be worth a bounce on new(er) lows.
DeleteSD - This puppy has kept on moving despite "excess crude" in the US?
ReplyDeleteLeon Cooperman talked it up this morning on CNBC
DeleteI heard he would be on, do you know of others he mentioned?
DeleteLet's try that again, bro. JCP @ 7.31.
ReplyDeleteBallz of steel man. The balance sheet is beyond repair in my opinion. There will always be trading opportunities even in the worst of stocks but this just has toe tag written all over it in my opinion. I've been known to be wrong so take it with a grain of salt.
DeleteOn that note + what happened to OSH, I think I'll stay away.
DeleteFBP - Any thoughts on this one? I'm not sure what it really is.....
ReplyDeleteLong SPY for a day trade at $169.69.
ReplyDeleteClosed at $169.93. Woo hoo.
DeleteLong again at $169.61. zipadeedoda.
DeleteSold at $169.8. Making lunch money here.
DeleteLong FU again at $6.49. Smaller position.
ReplyDeleteSold at $6.55. Looking to actually get in around the lows...
DeleteMy guess is it will close on the lows of the day and open briefly lower tomorrow below $6.24 then rip to $7+. I will be looking to buy around $6.24 tomorrow.
Deletewow. that was a sharper pullback than i was expecting. however, it is just below the $6.24 level i was looking at and could potentially be a fake out. will look to buy tomorrow if it drops below todays lows then reverses.
DeleteSell, lil-piggies, sell!!!!!
ReplyDeleteDANG chart pattern is almost identical to HSOL as of mid Sept...BEFORE it went 60% higher.
ReplyDeleteFU-ck!
ReplyDeleteI wouldn't ignore it. Bigger picture it's setting up much like NQ and KNDI did. Those were huge winners.
DeleteOnce House passes something nebulous, then -> to Senate.
ReplyDeleteJCP off @ 7.40.
ReplyDeleteGood morning ladies.
ReplyDeleteMarket saying FU to Congress.
ReplyDeleteMan, Twits is nothing but BORN.
ReplyDeleteThey should be playing some Chinese Credence Clearance Revival (CCCR).
DeleteOr GURE.
DeleteSORL, the Chinese auto parts company David recommended, up over 10% today to $4.50. Still holding and think it should get to $8.00.
ReplyDeleteInterestingly, my second best stock today is Korean Bank, KB, up 4%.
ReplyDeletePerhaps the market is starting to give more reasonable valuations to Asian stocks.
Something I will look into for sure.
I'm thinking the dips we noted in BITA and NOAH back in Feb and March, respectively, were buys. Not sure but it looks that way to me...
ReplyDeleteSold 1/2 of CCCR at $11.42 to $11.5
ReplyDeleteeh decided to sell the rest as well...$11.25 to $11.45. 18% or so gain in 2 days is hard to pass up.
Deletehttp://www.youtube.com/watch?v=espnFN9HPKw
ReplyDeleteWhich way is up?
ReplyDelete☝
DeleteLong SPXU at $19.35 just for a little hedge will take it off by end of the day.
ReplyDeleteclosed...
DeleteING - Fitch Withdraws ING U.S., Inc.'s Short-Term Commercial Paper Rating
ReplyDeleteAA to the teens by some time next year...no one is expecting it right?
ReplyDeleteExcellent point.
Delete"Packaging: 3Q beverage can volumes flattish = relatively positive
10/16/2013 5:26 PM
Overall 3Q13 US and Canadian beverage can shipments were down 0.5% y/y. Comparisons were relatively easy as US-only shipments were down 1.8% y/y in 3Q12. We are encouraged to see better-than-expected data as CCK's preannouncement commentary suggested sluggish shipments in 3Q."
I'll drink more beer.
DeleteNOR - This one's up, and it seems impossible for what looks to me like an ugly PIGlet.
DeleteBought a new freezer y-day, my 5yr old Chinese made chest freezer suffered a blowout from a corroded freon line, it rusted thru from moisture.
ReplyDeleteI've still got one that I bought in 1990 that was built in Canada. Not sure what the energy efficiency is like, but just keeps pluggin away.
DeleteI cut the inside wall, dug the foam insulation out and found a rusty steel freon line with a thin plating of copper, the brazed joint there was placed right where you'd expect it to sweat, and of course was corroded. Might have lasted another 10 years or more if they'd made that connection 6 inches closer to the compressor and painted it. Ideally, the freon lines should be copper tubing but that's a lot to ask for these days.
Delete(a) The Senate strikes a deal, and the DJIA rallies +150. I guess that means our problems are over!
ReplyDelete(b) The long bond (TLT) also jumps +1%.
(c) Miners (GDX) drop -1.8%, giving back most of yesterday’s +2.2% spike.
(d) What’s it all mean? I don’t really know, but I have a take: traders are closing shorts on the indexes, bond traders are (i) relieved +/- (ii) not buying the stock rally, and miners are simply resuming a downturn that will take them to new lows.
Mid Jan - How many believe we won't go through this again Jan?
ReplyDeleteIs it really gonna be this easy? Assuming a rise through 1722, will the all-time closing high of 1725.52 be closely behind and then the all-time high at 1729.86?
ReplyDeleteNLS - Heading back up, you guys have this one?
ReplyDeleteI don't think anyone does.
DeleteFought the good fight, and we didn't win. Another sellout/surrender, as if we didn't already know how it would turn out.
ReplyDeleteIf I were to channel Big Dave> After all is said and done, the indexes haven't done much the past few weeks. Now that the stalemate is over, the market's still stale, mate. I'll wait for things to sort themselves, then I'll swing at a decent pitch.
ReplyDeleteClever use of a ,
DeleteBuy the fear, sell the enthusiasm. Short term strategy. Long term market hasn't changed direction (yet?).
DeleteI'll be surprised if tomorrow isn't a down day.
ReplyDeleteLockheed Martin to cut 600 jobs amid tough market
Lockheed Martin (LMT) will lay off 600 employees in its Mission Systems and Training Division this month.
The plan is not linked to the government shutdown, but instead stems from a lackluster business environment, Reuters notes, citing a company spokesman.
"This action is necessary to address continuing challenges in our business environment, including continued uncertain program funding, delays in contract awards and an extremely competitive market," LMT says.
Makes you want to run out and buy LMT doesn't it.
Makes FMD look good, impossible to lay off that many employees there.
DeleteIBM - 6 straight Q's of lower sales?
ReplyDeleteBBY/NFLX - Two strong stocks, thank God for the consumer, we all shop at these two stores!
ReplyDeleteIn surprising news this morning, the Chinese bond rating agency downgraded US government debt, causing gold to jump. Who would have thought Chinese ratings companies had that much power?
ReplyDeleteI think they don't, dollar fell due to we have to go through this same BS again in January?.
DeleteGS - Good earnings being sold?
ReplyDeleteBig trading revenue drop hits Goldman
DeleteA big miss on revenue has Goldman (GS) off 3% in early trades after the release of Q3 earnings, even as the bank tries to soften things with a 10% dividend boost. Blankfein: "The Q3 results reflected a period of slow client activity ... Still, we saw various signs that our clients are prepared to act on significant transactions and we believe that the firm is well positioned to help our clients accomplish their objectives."
Investment banking revenue of $1.17B is roughly unchanged from a year ago, with advisory (M&A) business way down and underwriting (IPO) business way up. The backlog "increased significantly" from Q2.
Institutional client services revenue of $2.86B fell 32% Y/Y, led by a 44% decline in FICC revenue to $1.25B (even worse than already-weak Street estimates). "FICC operated in a challenging environment, which was characterized by economic uncertainty, difficult market-making conditions in certain businesses and lower levels of activity." Indeed.
Ouch! Compensation expense of $2.38B fell 35% from a year ago. The ratio of compensation and benefits to total revenue is 41% over the year's first nine months vs. 44% a year ago.
Jefferies Group reiterated $RH at Buy with PT:$88.00. Best play in retail.
ReplyDeleteHaving posted that, I might take profits here today. Those mattress #'s yesterday were UGLY.
Who in the hell buys mattress' anyway. I never have.
DeleteWhat do you sleep on? hay?
DeleteOld TPX recycled/restored mattress from under the bridge?
DeleteI think I got my last mattress from my parents, but damn, that must have been 20 years ago.
Deletewe wasted $2k on a new mattress this summer. worst investment ever in my opinion (don't tell Janna though)
DeleteOSTK + TZOO = ouch. Being old internet blows i guess.
ReplyDeleteWas wondering which way the coil would break.
DeleteAmazing that PM miners appear to be following PM's, GDXJ leading GDX too......
ReplyDeletehttp://www.businessinsider.com/dagong-downgrades-us-to-a--2013-10
ReplyDeleteUsually gold collapses a day or two following their US downgrades.
DeleteDGAZ, anyone?
ReplyDeleteH&S on DGZ, broke out to downside. Fakeout?
DeleteI almost bought DGAZ yesterday. Too chickenpookiesh*t to do it.
DeleteMe too, it feels like gambling.
DeleteT's and VIX fell and lower rates are easy money so market goes up?
ReplyDeleteAdded a bunch more GPRC at $2.53-2.55. Tough to add this thing.
ReplyDelete
ReplyDeleteAriad rises after JPMorgan defends shares
Beleaguered Ariad Pharmaceuticals (ARIA +10.4%) is enjoying a strong session thus far.
Market chatter (here, here, and here) indicates that the move is likely attributable to a JPMorgan note in which analysts say physicians may be less concerned about Iclusig's safety profile than investors.
JPM price target reportedly is $12.
i was looking at that one yesterday. do you like it?
DeleteSORL/KB - Wow, great movers.
ReplyDeleteNGas non-event.
ReplyDeleteBTUI - My secret solar play actually moved up from May
ReplyDeleteCCL - Technical buy at $32.51
ReplyDeleteBALT - Don't take your eyes off the ball.
ReplyDeleteGDX kicking butt today
ReplyDeleteDUST - This one looks good here, eh?
ReplyDeleteToo funny...Patrick Byrne (CEO OSTK that is the dude talking about Sith Lords back in 2005 or so) is apparently a doomsday guy and unless they are buying diamonds etc for their jewelry biz which is possible, he convinced the company to invest $6 Million in precious metals. This line item was on their statement of cash flows:
ReplyDeleteInvestment in precious metals - (5,980)
CCJ - ?
ReplyDelete1729.86 is all-time high, shall we get short near here?
ReplyDeleteThen we can say we shorted near the all-time high....
DeleteI still think we get one last wild burst higher...possibly to 1,800...we stall for a week or two, then we slowly grind lower for the next 18 months. maybe bottom out at 1,350?
DeleteFU - TOF, have you seen this guy's SA article?
ReplyDeletehttp://seekingalpha.com/article/1728882-where-there-is-smoke-there-is-fire-fab-universal-corp-just-rewrote-history?source=yahoo
Yup. I saw the short sellers articles on KNDI too the whole way up!
DeleteRES - This thing sure climbed back from the April event that scared me away.
ReplyDeletePick your favorite bear phrase:
ReplyDelete1.) "Market Internals are weak"
2.) "Market only goes up on weak volume"
3.) "The only reason it is going up is because of short covering" (how do you calculate that by the way?)
4.) "It's all a house of cards"
5.) "Only a matter of time before it all comes crashing down"
I'm a big fan of 2 and 3.
Seems like these are a part of a smoke screen devised to keep retail out of the market. The time to feel uncomfortable comes when these warnings disappear.
DeleteShort covering rally! :)
ReplyDelete