CP- I enjoyed reading the reactor info. Really amazing when you think about it....and there are a handful running around the globe 30,000 Leagues Under the Sea.
Those subs and aircraft carriers have much smaller reactors, not sure what size they are. So, assuming this 3rd reactor actually costs $10B and it serves 370,000 homes, that works out to ~$27,000/ residential home serviced by the added capacity.
Bank speak appears to have been correctly interpreted, although we won't know for certain until January 28. However, the drop in ICBC's stock price reflects conviction by investors.
(b) Meanwhile, a 'surprise' PMI reading of 49.5 (<50 implies contraction in Chinese manufacturing) roiled global markets on Thursday. The volatility continues this morning, with EEM bidding 38.77 premarket, a -3.7% discount from Wednesday's close.
1800 - Not sure if Shanghai can make it this low, but that's the target some have been looking for since last June. gold less than $1000 as well, which didn't and isn't happening (yet?). ENPH - Have a standing bid @ $7.20 BALT - Bid in @ $5.20 BSBR - I think Brazil might take a long time to resolve issues, maybe beyond my time horizon of max 2yrs
My suspiscion is buying the dip in emerging markets like Thailand and Indonesia is the best move, they should have further upside? I'm kinda warming to solar, only b/c of the PR issues with nuclear, which I think is the best solution from a technical standpoint.
Of course, the stocks I had written down to possibly buy are hanging in there pretty good today. If this sell-off continues, I'm sure they get dragged down too.
Seems to be a lot of concern about emerging markets and China and currencies. I don't understand the dynamics of this too well, but seems like buying an ETF like Turkey's (TUR) could make sense as I think the long term prospects for there are good with their key geography and improving economy, but it's really just a guess, so probably won't do it.
Gotta just love a good sh*t storm first thing in the morning..... BALT - I think this could be a good place to throw a few shares into the buckboard, but I want a better price since I hung on too long.
Made a small buy of hotel stock AHP - got some in a spinoff (from AHT) and the stock has got crushed due to a refinancing, so am expecting a bounce now that this is compete - could be 20% over the next few months.
Plus, the spinoff was small and I had a bit of US cash in the account, so wanted to make it worth my while to own.
Have you guys heard of the Baltic Tanker Dirty Index? http://www.lloydslistintelligence.com/llint/tankers/baltic-index.htm%3Bjsessionid=CC4DA5E303F6F3E0B34043E2865FBD78
I think clean tanker is for refined products, dirty is crude? Was there a bunch of crude coming to the gulf with the recent opening of the lower portion of pipeline? The lower section might be the reason for MOG's recent interest in CXO? I'm still trying to get a grasp on which way oil flows, north, south, east, west....
i decided to turn on CNBC for the past 2 hrs and its nothing but emerging markets. that EEM monthly chart looks eerily similar to IYT at Fall 2012. who is calling for a 50% 2-year move in EEM?
The US markets have just erased a month's worth of gains in 2 days.
(a) Opened a position in ECH (Chile) @ 42.75 (a 52-wk low). (b) Opened a position in FCX (Freeport McMoran Copper and Gold) @ 32.85. (c) Opened a position in VWO (Vanguard Emerging Markets) @ 38.05. (d) Opened a position in BSBR (Banco Santander, a Brazilian bank) @5.05. (e) Opened a position in FXI (China) @34.33. (f) May elect to open a position in RYWVX (Rydex 2x Emerging Markets) @ the close.
Cold today, Hot Tamale? A windfarm http://santiagotimes.cl/90-megawatt-wind-farm-comes-online-northern-chile/ A solar power design I can understand: http://www.csp-world.com/news/20140109/001295/abengoa-wins-first-csp-tender-chile-will-build-110-mw-tower-plant-generate Coal fired power plant was approved by courts, despite opponents attempts: http://santiagotimes.cl/fishermen-environmentalists-slam-high-courts-coal-plant-approval/
That's a 740MW coal plant, 90MW wind farm, and a 110MW thermal solar project. So crunch the figures for construction cost/MW and try to estimate operational costs somehow???
What a mess... Glad I got out of BALT yesterday. Even happier that I got out of LZEMX a few weeks ago when its chart stopped looking nice. Maybe the new lesson is that when a chart that was looking nice stops looking nice, it will first get bad and then ugly before starting to look nice again. So no need to stay with call options in charts that have stopped looking nice. On the other hand, the GLD calls I picked up yesterday are looking even better today, 'cause GLD chart was already looking nice yesterday. :)
Anyone who starts scaling into EEM now for a long-term hold might end up scaling into it until $30 or lower, since right now there is only air under its 5-year chart. I'll wait until EEM rises above its October 2013 highs before moving a part of my 401K into it. From now on, will only invest into stocks whose charts are in a long-term uptrend (EEM keeps making lower highs since 2011).
True. It is making a kind of a mega wedge formation. Wouldn't it be smart to wait to see in which direction that wedge gets broken and then ride that direction for a year?
maybe but then you could get a false breakout/down. typically buying cheap valuations tends to workout over the longer term. buying the S&P at 900 in october 2008 was horrible 4 months later. 4 years later?
"Wouldn't it be smart to wait to see in which direction that wedge gets broken and then ride that direction for a year?" My suggestion involves a strategy of buying the lower trend line, until it doesn't work?
Liz Ann Sonders at Schwab usually has a good take on things. She was bullish for the past 5 years. Anyway, she had some comments on China. I don't know if you guys remember that chart I posted several years ago about the correlation between slower econ growth and better returns. I wonder if this will play out in China as it has started growing relatively slower...
"China—near term economic risks but improved stock outlook
China's economic growth outlook remains to the downside in our opinion, continuing our narrative of "slower growth is the new normal in China." In fact, heading into the Chinese New Year at the end of January, it's possible another cash crunch hits its economy. Demand for cash typically rises during this time, when businesses close and holiday spending rises. The timing of the Chinese New Year also tends to create distortions in economic data, which could obscure economic trends. As a result, 'Chinese growth concerns may come to the fore again.
However, we believe small changes in the absolute level of growth are less important than the quality of growth. In late 2013, the Chinese government outlined an ambitious reform plan in the "Third Plenum" in an attempt to overhaul its economy. The conditions in China are ripe for reform, and there has already been notable progress on 23 of the 60 concrete tasks identified in the plan. The top reforms we view favorably include financial system, local government budgets, rural land rights, and hukou (household registration) reforms, as detailed in our article.
Investors have shunned Chinese stocks
Investors have shunned Chinese stocks
Source: Morningstar. As of November 30, 2013.
China could be entering the next phase of growth that is more sustainable as a result of these reforms; and we are upgrading the Chinese stock market to a positive view, large caps in particular. Valuations and investor sentiment on Chinese stocks are depressed and could rise—higher-quality growth typically commands a higher valuation. However, we still have a neutral view on the overall emerging market equity universe due to structural issues for many countries. We will be writing more about this and other issues in articles at www.schwab.com/oninternational."
Good, but you have to explain how that worked and what you plan to do next(or keep doing?), if anything. The Canadian dollar dropped all last year, and you hid your cash in the US market, is that what happened, or something else?
SALT - The new kid on the block, eh? "•Scorpio Bulkers Inc. Announces Newbuilding Agreements for 22 Dry Bulk Vessels for an Aggregate of $1,171 MillionMarketwired(Mon, Jan 6)"
Does this look like a locomotive coming down the tracks? Perhaps the way to corner the market is by having the most fuel efficient fleet financed at the lowest rates ever in history?
Since the "largest" Marine diesel reciprocating engine is 108,000hp, seem like GE's turbine system might be competive, not sure if the fuel consumption of one is better than the other. Hull shape and design also contribute to fuel savings.
1993 - "Each DDG-51 ship is powered by four LM2500 gas turbines which are in a combined gas and gas (COGAG) configuration. Each reduction gear combines the input of two LM2500 engines rated at 26,250 brake horsepower (bhp) for a total output of 105,000 bhp per ship."
ha. i was thinking about how it wouldn't surprise me if there's a quasi bailout of that stupid gold based bank that supposedly had issues (most likely bull shit).
Canadian dollar - Okay, so now that the Canadian dollar has fallen, then are you guys up there going to start dumping the gold you've been hording, or what?
alright lord BALT i more here. just whipped up the averages for BDI this quarter thus far: 1581 is the avg. despite the massive crash it is still 98.5% above the average from Q1 2013.
after incorporating the expanded fleet for BALT, based on this average they should still earn around $0.14 per quarter, with $0.27 per quarter in earnings before depreciation which is what they base dividends off of. that's plenty of room for a bump up in dividend which is something that keeps me very interested in this stock.
SALT - Have you seen this baby (just wondering, it looks formidable!), this has to be something for consideration? "alright lord BALT i more here." Um, I caught all but this part! Yep, something weird is going on, human emotions are running high as well.
CP -- Yeah that SALT IPO came last December to capture what they think will be a rebound in the dry bulk trade. Demand has grown a solid 5%+ or so annually since 2007 when the index peaked at almost 10-fold the current spot rates. 5% annually for 7 years is a 40% increase. Only problem is supply increased from around 7,000 ships to 10k or actually almost 11k from what i've read, a greater increase than the increase in demand. Does that warrant a drop in rates of 90% (or 95% peak to trough)? not sure but my guess is no.
Lots of people are saying that if spot rates rise then idle ships will just hop in and take advantage of spot rates. where else did i hear that argument???? oh yeah the bears/skeptics were saying that about Nat Gas as it rose to $3, then $3.25, then $3.50, then $4, and now $5.16. People would just open up the wells and get as much nat gas as possible if prices rose high enough. Supposedly the supply would put a lid on nat gas forever and there was even a chance we would see $0 nat gas.
Within 1-3 years I think you will see a drastically different dry bulk market where spot rates are sustainable at much higher levels. I doubt it will see new all time highs but I'll take 4,000.
Okay, just wanted to pass that by you in case you might not be aware of SALT's existence for whatever reason. I can see how some ships sitting on the sidelines might come into play, just as the newest (fuel-efficient) ones will likely have an advantage.
Say for instance some old rusty tub sitting idle costs twice as much to operate, the new(est) fuel-efficient one will likely win the contract. So I like that BALT's ships are new, but of course some will be dry-docked as well, so the opportunity window may be closing, IDNK how to figure this all out of course, thinking out loud.
Hope all is well, I am still in Tahoe Land. Just stopped by to say hi and hoping you still remember me! Not much trading lately but might want to get back in after the nose dive today!
Materials sucked (especially gold miners), interest sensitives like utilities and telco's did poorly and energy was flat. Other than those, the market was probably up 30%, similar to the US. The problem is that half of the TSX is materials and energy, so they brought the overall return down.
The rising US$ actually helped my returns as I got the extra kicker from my US listed stocks.
Yes, the $US has risen from beginning around mid '11, I kinda feel like there's no real reason for it to crater from here aside perhaps for potential rotation into other markets/currencies.
Friday's $USD drop is kinda baffling in light of the recent concern over emerging market currencies, feels like a false move to me. Ditto for Canadian dollar, demand for commodities should climb with increasing growth. Energy seems to be more plentiful, based on considerably lower gasoline prices over the period, meanwhile the vehicle fleet fuel-efficiency has improved.
Canadian $ has been overvalued for a few years due to our good economy, banks and fiscal situation. Now thatthe US is getting better, the safety premium in the Canadian dollar is going away, so it really is more the situation of moving from overvalued to fairly valued now.
Based on extensive reading this weekend, I conclude it's too 'early' to open positions in emerging markets. Whether a 'dead cat' occurs Monday or not, I plan to rein in positions. Valuation + sentiment are not enough. As David pointed out, I need momentum on my side as well. No worries. Managing risk is paramount, and managing risk includes the ability to change takes on a dime.
The ideal scenario would be a 'dead cat bounce' Monday, followed by a second leg down. But I'm leaning towards an extension of Friday's selloff.
Lots of similarities between this market and the 1995/6 market. Even the past month or so has been almost identical to the turn in 1995/6. After a huge rally, a sideways stall that was followed by a sharp two day selloff in January, then several days of no bounce, then a massive rally. Not saying it has to happen again but I'm reading a lot of worry out there:
Already the aaii sentiment surveys are showing like 65% neutral or bearish which is one of the higher readings in a while. Give us 3 or 4 days of failed bounces and everyone should be on the side of the bears. Then monster truck rally.
Improving fundamentals will trump technicals over time. Or another way of saying it - who is more likely to be right - Doc Barter and his chart or Wilbur Ross and his billions?
Not that it couldn't continue down for a while as there are a lot of people with profits to protect, but looking out a ways, they should be higher.
Definitely worth hearing out but he's not perfect (see recommending SiD at 4 or 5 before 50% drop, recommending gold and gold miners before big drop and targeting 1550 as top in mkt). No one is though. I still think supply coming in line with demand is huge and something the mot hasn't seen in a long while. I don't think the peak is even close given all of them are a good deal below book. BALTs ships were all purchased recently near trough pricing for ships and being new they're more fuel efficient. I do envision a scenario where the markets stall but shipping still does well given supply / scrapping factors
NWLI - Looks like a bull flag, I'd hate to be forced into selling this one here despite arguably it isn't a potential 10x bagger... BSBR - Does that qualify as a hammer? Volume has been impressive.
I've never heard this take befor I've been following you for years ever since I found you on TOS back in 2007. I love your disciplined and thoughtful approach to understanding the markets. Thanks for the great work. Anyway, my question... I often hear you say liquidation breaks strengthen the market. Could you describe why this is the case in conceptual terms and how it relates to the different timeframes (day vs longer term money). Thanks, Andrew J. from Bozeman, MT Perfect question in the context of the strong break the markets have just had over the last couple of days. A liquidation break is simply a sharp move that is against the current, prevailing trend. It is often very sudden and has very quick tempo, often sucking in day timeframe players into thinking that it's going to continue further and then indeed doesn't. The selling that is happening is what we would refer to as "old business" as it's people who are already long from earlier. New business type selling is when new shorts come into the market and establish a position. In a classic liquidation break, it is only the most recent buyers who are liquidating. Therefore, inventory just needs to balance a little and the trend resumes soon after with no follow through at all to the downside. These buyers are usually of the day timeframe and could be possibly scalpers, overnight futures traders, or momentum players. Their timeframe outlook is very short, so when they don't get satisfaction right away, they are out of there. So, why do these breaks strengthen the market. Simply because they take potential sellers out. The only way to get out of a long is by selling it. Think of everyone who is long as a potential seller at some point. If the market is overly long then it is that much more susceptible to a selloff. If inventory is more balanced, then the odds are lower. It's not much different from whomever manages the inventory at your local Wal-mart realizing that they ordered too many vacuum cleaners and they're piled up in the back. Vacuum cleaners will soon be on sale right up front. The second part of your question deals with timeframes and this is also very important. When thinking of the different timeframe players, think of how long their holding period usually is and that will tell you how long the liquidation break could go on for. The aforementioned momentum players who operate in the day timeframe can bail out of their positions very quickly and such a break can be over in minutes. Intermediate and long term traders who may be in the market for weeks to months to years will take much longer to liquidate their positions and a break can last longer.
Carlos Slim died today, in a fall. Mexican peso chart downside breakout on tap. Seems like a race to the bottom in progress, for South America. That's the same phenomenon we've seen for Canada for a year now.
I remember when we were looking at this in early 2012 as we speculated that the housing sector was bottoming. It's been 2 years and the rally continues. These stocks that went thru massive downturns have slowly creeped higher and higher. Just like LNG or ades. I think aa is also another one that will have a similar chart in a year or two
Lots of housing related stocks have done really well and housing really hasn't fully rebounded yet. U.S. is still building less than almost anytime in the last 50 years:
The catch is a lot of housing related companies (like lumber for example) are quite expensive on current metrics so have built a lot of the upcoming expected growth into their stock prices already, so the way to win is to figure out if housing will actually be better or worse than the stock prices are thinking - not easy.
We have the obligatory 'dead cat' this morning (one of many 'backstops' to buying panic). EEM currently bidding 38.42, about a +0.5% premium to Friday's close. I have unloaded partial positions premarket, and will unload all remaining positions during the open and/or 1030 am trading window for Rydex funds
'Probably the best big cap earnings report so far this quarter has been from Netflix, Inc. (NFLX) which is our Stock of the Week. NFLX is the leader in providing internet television services. It is growing extremely rapidly and is expected to double its earnings per share to $4.01 in 2014. The company is expanded rapidly overseas and, while this has been a drag on current earnings, it is going to produce tremendous growth in the future.
'There are plenty of bears who question NFLX’s valuation and business model but this is a classic big cap momentum situation. The fact that there are skeptics is one of the things that will help keep it running.
'With the overall market presently in turmoil momentum traders will be looking for the stocks that have held up the best recently. NFLX will be at the top of that list.
'As always we would not chase a gap-up on Monday morning but would look for a strong close probably over the $390 level. We’d keep a stop under the $380 mark which is the December highs. The overall market is problematic and all positions need to be managed carefully right now.'
Pretty optimistic report out today from nordea bank on the shipping industry. They said the dry bulk market is at the beginning of a two year or more rally. They were pretty take on their expectations for rates rising...about 15% for 2014 and same for 2015. They said could be significant scrapping with 25% of fleet being 15 years old or more (13% is 20 years old or more).
I think their rate estimates will be very conservative but that's generally what you see as a cycle bottoms out because people don't want to look foolish in calling for a big rally.
I don't think you've seen close to a peak given only a couple of companies turned breakeven so far in this rally. When everyone is making gobs of money and people are expecting 50% increases in rates the. It's time to start looking for tops
Magic Software (MGIC) down 10% this morning on no news. Always love it when that happens, especially with a foreign company. You don't know if there is some inside news out there or maybe just a hedge fund getting a margin call.
BALT - Seems like more volume on dips and volume fades as price lifts, like accumulation. Today could be the holding pattern reversal. If BDI jumps, we won't be here long.....
NIHD - Good thing we didn't stay in this one, was thinking it looked like a bull flag since it was moving in favor of bears following the flag pole. Is the gap up closed yet?
Did you guys catch Gaga's spikes??
ReplyDeleteCP- I enjoyed reading the reactor info. Really amazing when you think about it....and there are a handful running around the globe 30,000 Leagues Under the Sea.
ReplyDeleteThose subs and aircraft carriers have much smaller reactors, not sure what size they are. So, assuming this 3rd reactor actually costs $10B and it serves 370,000 homes, that works out to ~$27,000/ residential home serviced by the added capacity.
DeleteSSE composite up 0.8%. Up higher than it was before the infamous negative pmi print last night. China has bottomed
ReplyDeleteSome sources think today's lack of enthusiasm was due to Argentina's currency drop (-13%).
Delete(a) http://news.yahoo.com/china-39-icbc-says-help-repay-investors-troubled-031544532--sector.html;_ylt=AsEXpTtyvK21HPg1C3iyDN3QtDMD;_ylu=X3oDMTBsanZicWdrBGNvbG8DZ3ExBHBvcwMxBHNlYwNzcg--
ReplyDeleteBank speak appears to have been correctly interpreted, although we won't know for certain until January 28. However, the drop in ICBC's stock price reflects conviction by investors.
(b) Meanwhile, a 'surprise' PMI reading of 49.5 (<50 implies contraction in Chinese manufacturing) roiled global markets on Thursday. The volatility continues this morning, with EEM bidding 38.77 premarket, a -3.7% discount from Wednesday's close.
Don't get me wrong. I don't believe we are headed for anything more than a mild correction, which may end as early as this morning.
DeletePKX - The $70 gap up was closed yesterday.
ReplyDeleteBSBR - A Chinese slowdown will likely be hard on Brazil, I assume.
ReplyDeleteLong 3K @ 5.00
DeleteNo need to practice knife-catching, IMO.
DeleteIt's not. Longer term hold.
DeleteYes, interesting play. Especially against the backdrop of a 5-year chart.
DeleteIt's obviously just a starter too.
DeleteBDI - 1246 - Today, Friday, 24 January 2014, the Baltic Dry Index climbed down 2%, 25 points to 1,246 points.
ReplyDelete1800 - Not sure if Shanghai can make it this low, but that's the target some have been looking for since last June. gold less than $1000 as well, which didn't and isn't happening (yet?).
ReplyDeleteENPH - Have a standing bid @ $7.20
BALT - Bid in @ $5.20
BSBR - I think Brazil might take a long time to resolve issues, maybe beyond my time horizon of max 2yrs
What are the odds that investors conditioned to BTFD get burned this time?
ReplyDeleteI think buying the dip works. Hard to see this turning into a bear market with the major economies getting better.
DeleteThe question is it a 2% dip, a 5% dip or 8% dip. I'd even be surprised by a 10% correction.
But there is lot going on in the markets now, so I could easily be wrong.
My suspiscion is buying the dip in emerging markets like Thailand and Indonesia is the best move, they should have further upside?
DeleteI'm kinda warming to solar, only b/c of the PR issues with nuclear, which I think is the best solution from a technical standpoint.
suspiscion, huh? India, too.
DeleteOf course, the stocks I had written down to possibly buy are hanging in there pretty good today. If this sell-off continues, I'm sure they get dragged down too.
ReplyDeleteSeems to be a lot of concern about emerging markets and China and currencies. I don't understand the dynamics of this too well, but seems like buying an ETF like Turkey's (TUR) could make sense as I think the long term prospects for there are good with their key geography and improving economy, but it's really just a guess, so probably won't do it.
I recall Thinking some time in q1 we would have a washout in emerging mets which would set the tone for a great year. Wonder if this is it
DeleteMkts
DeleteThere was one big seller there.
ReplyDeleteGotta just love a good sh*t storm first thing in the morning.....
ReplyDeleteBALT - I think this could be a good place to throw a few shares into the buckboard, but I want a better price since I hung on too long.
I may be wrong, but I think we all prefer buying capitulation (as opposed to breakouts). And EEM holders are being tested.
ReplyDeleteThat would be correct.
DeleteMade a small buy of hotel stock AHP - got some in a spinoff (from AHT) and the stock has got crushed due to a refinancing, so am expecting a bounce now that this is compete - could be 20% over the next few months.
ReplyDeletePlus, the spinoff was small and I had a bit of US cash in the account, so wanted to make it worth my while to own.
BALT - Reaching panic mode yet?
ReplyDeleteBack in 1/2 position @ $5.29
DeleteWell now we know who bought the 97,000 shares down there!
DeleteENPH - Mark, please stop holding this thing up and let me in!
ReplyDeleteHave you guys heard of the Baltic Tanker Dirty Index?
ReplyDeletehttp://www.lloydslistintelligence.com/llint/tankers/baltic-index.htm%3Bjsessionid=CC4DA5E303F6F3E0B34043E2865FBD78
Is that a measure of the contraband being transported in the hulls?
DeleteLooks like it is for crude oil shipping rates. Hanging in much better than the dry bulk for sure.
Deletehttp://www.businessmonitor.com/news-and-views/bloomberg-tanker-index-less-representative-of-dirty-tanker-operators
DeleteI think clean tanker is for refined products, dirty is crude? Was there a bunch of crude coming to the gulf with the recent opening of the lower portion of pipeline?
DeleteThe lower section might be the reason for MOG's recent interest in CXO?
I'm still trying to get a grasp on which way oil flows, north, south, east, west....
yeah its for crude oil. just never heard of it before.
DeleteThere is a lot of info in the shipping industry, but a lot of it requires subscriptions to get.
Delete$1.02 swing in BALT on the weekly chart. Almost an even $1, appears to be going as planned. Will next weeks swing be $0.75 or $0.50 ?
ReplyDeleteUPL - Do ya like the 3yr chart?
ReplyDeleteIndia's coal imports rise 20 pct to help fuel new power plants 09/01/2014
ReplyDeletei'm quite sure that buying EEM right here will be a very very smart move within 2 years.
ReplyDeletei decided to turn on CNBC for the past 2 hrs and its nothing but emerging markets. that EEM monthly chart looks eerily similar to IYT at Fall 2012. who is calling for a 50% 2-year move in EEM?
Delete"13 straight weeks of outflows ($2.4bn = largest in 5 weeks and longest outflow streak in 11 years) "
DeleteENPH now green wow
ReplyDeleteok who's long UGAZ, ENPH and YRCW today?
ReplyDeleteECH @ 42.75.
ReplyDeleteECH @ 42.75.
ReplyDeleteINT - Looks like the ships left port today, for their destinations
ReplyDeleteThe US markets have just erased a month's worth of gains in 2 days.
ReplyDelete(a) Opened a position in ECH (Chile) @ 42.75 (a 52-wk low).
(b) Opened a position in FCX (Freeport McMoran Copper and Gold) @ 32.85.
(c) Opened a position in VWO (Vanguard Emerging Markets) @ 38.05.
(d) Opened a position in BSBR (Banco Santander, a Brazilian bank) @5.05.
(e) Opened a position in FXI (China) @34.33.
(f) May elect to open a position in RYWVX (Rydex 2x Emerging Markets) @ the close.
Cold today, Hot Tamale?
DeleteA windfarm
http://santiagotimes.cl/90-megawatt-wind-farm-comes-online-northern-chile/
A solar power design I can understand:
http://www.csp-world.com/news/20140109/001295/abengoa-wins-first-csp-tender-chile-will-build-110-mw-tower-plant-generate
Coal fired power plant was approved by courts, despite opponents attempts:
http://santiagotimes.cl/fishermen-environmentalists-slam-high-courts-coal-plant-approval/
That's a 740MW coal plant, 90MW wind farm, and a 110MW thermal solar project. So crunch the figures for construction cost/MW and try to estimate operational costs somehow???
DeleteI got the DT's when TT was down here. Thank god ENPH is doing all the heavy lifting today...otherwise yikes.
ReplyDeleteAny links to that DT site?
DeleteAlright, Hoof-Hearted!
ReplyDeleteBrutal today. Half position in RYWVX @ the close
ReplyDeleteLooks like some of my earlier posts are starting to trickle in. What happened to Google today?
ReplyDeleteOn days like this, it helps to remember that the market won't give it to us. We have to take it.
ReplyDeletehttp://www.youtube.com/watch?v=kIsyHKsjftY
Hope for gains, buy the mayhem.
What a mess... Glad I got out of BALT yesterday. Even happier that I got out of LZEMX a few weeks ago when its chart stopped looking nice. Maybe the new lesson is that when a chart that was looking nice stops looking nice, it will first get bad and then ugly before starting to look nice again. So no need to stay with call options in charts that have stopped looking nice. On the other hand, the GLD calls I picked up yesterday are looking even better today, 'cause GLD chart was already looking nice yesterday. :)
ReplyDeleteTGIBF !!!!!!
ReplyDelete1848 woulda made a nice short, huh?
ReplyDeleteAnyone who starts scaling into EEM now for a long-term hold might end up scaling into it until $30 or lower, since right now there is only air under its 5-year chart. I'll wait until EEM rises above its October 2013 highs before moving a part of my 401K into it. From now on, will only invest into stocks whose charts are in a long-term uptrend (EEM keeps making lower highs since 2011).
ReplyDeletedepends on how you look at it i guess...i see higher lows since 08.
DeleteTrue. It is making a kind of a mega wedge formation. Wouldn't it be smart to wait to see in which direction that wedge gets broken and then ride that direction for a year?
Deletemaybe but then you could get a false breakout/down. typically buying cheap valuations tends to workout over the longer term. buying the S&P at 900 in october 2008 was horrible 4 months later. 4 years later?
Delete"Wouldn't it be smart to wait to see in which direction that wedge gets broken and then ride that direction for a year?"
DeleteMy suggestion involves a strategy of buying the lower trend line, until it doesn't work?
Different strokes for different folks, bro.
DeleteCurrency crisis weekend, Turkish Lire and Argentinian Peso
ReplyDelete80/20 Rule - I honestly wasn't thinking BALT would fall back to $5.20, but it did.... 1788 is the next strong SPX support level.
ReplyDeleteLiz Ann Sonders at Schwab usually has a good take on things. She was bullish for the past 5 years. Anyway, she had some comments on China. I don't know if you guys remember that chart I posted several years ago about the correlation between slower econ growth and better returns. I wonder if this will play out in China as it has started growing relatively slower...
ReplyDeletehttp://www.schwab.com/public/schwab/resource_center/expert_insight/todays_market/recent_commentary/schwab_market_perspective.html
"China—near term economic risks but improved stock outlook
China's economic growth outlook remains to the downside in our opinion, continuing our narrative of "slower growth is the new normal in China." In fact, heading into the Chinese New Year at the end of January, it's possible another cash crunch hits its economy. Demand for cash typically rises during this time, when businesses close and holiday spending rises. The timing of the Chinese New Year also tends to create distortions in economic data, which could obscure economic trends. As a result, 'Chinese growth concerns may come to the fore again.
However, we believe small changes in the absolute level of growth are less important than the quality of growth. In late 2013, the Chinese government outlined an ambitious reform plan in the "Third Plenum" in an attempt to overhaul its economy. The conditions in China are ripe for reform, and there has already been notable progress on 23 of the 60 concrete tasks identified in the plan. The top reforms we view favorably include financial system, local government budgets, rural land rights, and hukou (household registration) reforms, as detailed in our article.
Investors have shunned Chinese stocks
Investors have shunned Chinese stocks
Source: Morningstar. As of November 30, 2013.
China could be entering the next phase of growth that is more sustainable as a result of these reforms; and we are upgrading the Chinese stock market to a positive view, large caps in particular. Valuations and investor sentiment on Chinese stocks are depressed and could rise—higher-quality growth typically commands a higher valuation. However, we still have a neutral view on the overall emerging market equity universe due to structural issues for many countries. We will be writing more about this and other issues in articles at www.schwab.com/oninternational."
..and she's hot.
DeleteGee, thanks a lot...
ReplyDeleteWells Fargo downgrades Ensco $ESV Diamond Offshore $DO Noble Corp. $NE and Transocean $RIG to Market Perform from Outperform.
Too funny.
DeleteNice to be measuring my stocks in CDN $ this year. My portfolio is up 0.8% YTD, but if it was in US$, it would be down about 3.6%.
ReplyDeleteSuch a huge move in the US$ / CDN$ rate this year.
Good, but you have to explain how that worked and what you plan to do next(or keep doing?), if anything. The Canadian dollar dropped all last year, and you hid your cash in the US market, is that what happened, or something else?
DeleteRecency bias. When prices move up, people think they'll continue higher. When prices move down, people think they'll continue falling.
ReplyDeletePuerto Rico (FBP & ?) - Hearing a bearish drumbeat sounding for Puerto Rican government debt this evening.
ReplyDeleteSALT - The new kid on the block, eh? "•Scorpio Bulkers Inc. Announces Newbuilding Agreements for 22 Dry Bulk Vessels for an Aggregate of $1,171 MillionMarketwired(Mon, Jan 6)"
ReplyDeleteDoes this look like a locomotive coming down the tracks? Perhaps the way to corner the market is by having the most fuel efficient fleet financed at the lowest rates ever in history?
Deletehttp://www.scorpiobulkers.com/content/our-fleet
Since the "largest" Marine diesel reciprocating engine is 108,000hp, seem like GE's turbine system might be competive, not sure if the fuel consumption of one is better than the other. Hull shape and design also contribute to fuel savings.
Delete1993 - "Each DDG-51 ship is powered by four LM2500 gas turbines which are in a combined gas and gas (COGAG) configuration. Each reduction gear combines the input of two LM2500 engines rated at 26,250 brake horsepower (bhp) for a total output of 105,000 bhp per ship."
No worries, guys. I just emailed my bud Lou Jiwei (the Finance Minister of China) and asked him to jack the ---- out of the Shanghai index on Monday.
ReplyDeleteWell it's about time you got off your azz man, WTF????
Deleteha. i was thinking about how it wouldn't surprise me if there's a quasi bailout of that stupid gold based bank that supposedly had issues (most likely bull shit).
DeleteCanadian dollar - Okay, so now that the Canadian dollar has fallen, then are you guys up there going to start dumping the gold you've been hording, or what?
ReplyDeleteARII - Notice this one barely budged today.
ReplyDeletealright lord BALT i more here. just whipped up the averages for BDI this quarter thus far: 1581 is the avg. despite the massive crash it is still 98.5% above the average from Q1 2013.
ReplyDeleteafter incorporating the expanded fleet for BALT, based on this average they should still earn around $0.14 per quarter, with $0.27 per quarter in earnings before depreciation which is what they base dividends off of. that's plenty of room for a bump up in dividend which is something that keeps me very interested in this stock.
SALT - Have you seen this baby (just wondering, it looks formidable!), this has to be something for consideration?
Delete"alright lord BALT i more here." Um, I caught all but this part!
Yep, something weird is going on, human emotions are running high as well.
http://en.wikipedia.org/wiki/Lord_Baltimore
DeleteCP -- Yeah that SALT IPO came last December to capture what they think will be a rebound in the dry bulk trade. Demand has grown a solid 5%+ or so annually since 2007 when the index peaked at almost 10-fold the current spot rates. 5% annually for 7 years is a 40% increase. Only problem is supply increased from around 7,000 ships to 10k or actually almost 11k from what i've read, a greater increase than the increase in demand. Does that warrant a drop in rates of 90% (or 95% peak to trough)? not sure but my guess is no.
Lots of people are saying that if spot rates rise then idle ships will just hop in and take advantage of spot rates. where else did i hear that argument???? oh yeah the bears/skeptics were saying that about Nat Gas as it rose to $3, then $3.25, then $3.50, then $4, and now $5.16. People would just open up the wells and get as much nat gas as possible if prices rose high enough. Supposedly the supply would put a lid on nat gas forever and there was even a chance we would see $0 nat gas.
Within 1-3 years I think you will see a drastically different dry bulk market where spot rates are sustainable at much higher levels. I doubt it will see new all time highs but I'll take 4,000.
Okay, just wanted to pass that by you in case you might not be aware of SALT's existence for whatever reason. I can see how some ships sitting on the sidelines might come into play, just as the newest (fuel-efficient) ones will likely have an advantage.
DeleteSay for instance some old rusty tub sitting idle costs twice as much to operate, the new(est) fuel-efficient one will likely win the contract. So I like that BALT's ships are new, but of course some will be dry-docked as well, so the opportunity window may be closing, IDNK how to figure this all out of course, thinking out loud.
HLF - A Spike in Options Trading Before Herbalifes Stock Fell at New York Times -8.89%
ReplyDeleteOops! :O
Isn't is happy hour yet?
ReplyDeletehaha,
VB
Yes, Crazy spikes Mark.
ReplyDeleteHope all is well, I am still in Tahoe Land. Just stopped by to say hi and hoping you still remember me! Not much trading lately but might want to get back in after the nose dive today!
Love,
Vanilla Bean
Welcome back VB. Great to hear from you. How's Tahoe? See you in 6 months?
DeleteHey Girl!! Of course we remember you. Stop in more than every few years!
Delete..and she's hot.
DeleteCool, hi VB! :)
DeleteCP, Canada was good mostly good last year.
ReplyDeleteMaterials sucked (especially gold miners), interest sensitives like utilities and telco's did poorly and energy was flat. Other than those, the market was probably up 30%, similar to the US. The problem is that half of the TSX is materials and energy, so they brought the overall return down.
The rising US$ actually helped my returns as I got the extra kicker from my US listed stocks.
Yes, the $US has risen from beginning around mid '11, I kinda feel like there's no real reason for it to crater from here aside perhaps for potential rotation into other markets/currencies.
DeleteFriday's $USD drop is kinda baffling in light of the recent concern over emerging market currencies, feels like a false move to me. Ditto for Canadian dollar, demand for commodities should climb with increasing growth. Energy seems to be more plentiful, based on considerably lower gasoline prices over the period, meanwhile the vehicle fleet fuel-efficiency has improved.
Canadian $ has been overvalued for a few years due to our good economy, banks and fiscal situation. Now thatthe US is getting better, the safety premium in the Canadian dollar is going away, so it really is more the situation of moving from overvalued to fairly valued now.
Delete
ReplyDeleteBased on extensive reading this weekend, I conclude it's too 'early' to open positions in emerging markets. Whether a 'dead cat' occurs Monday or not, I plan to rein in positions. Valuation + sentiment are not enough. As David pointed out, I need momentum on my side as well. No worries. Managing risk is paramount, and managing risk includes the ability to change takes on a dime.
The ideal scenario would be a 'dead cat bounce' Monday, followed by a second leg down. But I'm leaning towards an extension of Friday's selloff.
"1788 is a strong support level" I'll be watching.
DeleteDocBarter @DocBarter 7h
ReplyDeleteDow target range 14600-14800 pic.twitter.com/SY0dERxzbs
My favourite short for 2014 into 2016. Is a gift ! Most likely negative divergence setting up this summer pic.twitter.com/VD4hfsA0RH
ReplyDeleteThis was from Doc also.
DeleteThe $RUT !!!!!
DeleteCHGG- How can this thing only have .18/share cash?
ReplyDeleteAnd, why is book negative -$1.41?
DeleteBAC - Caught front running? http://finance.yahoo.com/news/exclusive-bank-americas-trading-practices-141352193.html?l=1
ReplyDeleteLots of similarities between this market and the 1995/6 market. Even the past month or so has been almost identical to the turn in 1995/6. After a huge rally, a sideways stall that was followed by a sharp two day selloff in January, then several days of no bounce, then a massive rally. Not saying it has to happen again but I'm reading a lot of worry out there:
ReplyDeletehttp://finance.yahoo.com/echarts?s=^GSPC+Interactive#symbol=^gspc;range=19950203,19960212;compare=;indicator=sma%2850,100%29+volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
Already the aaii sentiment surveys are showing like 65% neutral or bearish which is one of the higher readings in a while. Give us 3 or 4 days of failed bounces and everyone should be on the side of the bears. Then monster truck rally.
DeleteA 3 or 4 day stall actually makes the most sense given the jobs report on fri. Will be an interesting week either way.
DeleteRH - This one actually had good week, but that looks like a bear flag to me.
ReplyDeleteVEGYF - This little company has one of the best/largest uranium deposits in the US
ReplyDeleteHII - Noticing weakness now that BACML finally moved their price target to $102..... What a surprise.
ReplyDeleteCXO - Right on the lower trend line, could be a good entry here. Low volume price drop = no sellers? Got balls? I bet MOG does!
ReplyDeleteCIE is looking pretty dang strong too, looks like maybe MOG knows what he's talking about.
DeleteUt oh...
ReplyDeleteDocBarter @DocBarter 4h
The shipping sector which we recommend autumn 2012 and early 2013 as great gains ahead is nor OVERBOUGHT. Take profit
Wonder where he has been - haven't seen anything from him in months?
DeleteImproving fundamentals will trump technicals over time. Or another way of saying it - who is more likely to be right - Doc Barter and his chart or Wilbur Ross and his billions?
DeleteNot that it couldn't continue down for a while as there are a lot of people with profits to protect, but looking out a ways, they should be higher.
I agree. The guy is pretty damn good though.
DeleteDefinitely worth hearing out but he's not perfect (see recommending SiD at 4 or 5 before 50% drop, recommending gold and gold miners before big drop and targeting 1550 as top in mkt). No one is though. I still think supply coming in line with demand is huge and something the mot hasn't seen in a long while. I don't think the peak is even close given all of them are a good deal below book. BALTs ships were all purchased recently near trough pricing for ships and being new they're more fuel efficient. I do envision a scenario where the markets stall but shipping still does well given supply / scrapping factors
DeleteNWLI - Looks like a bull flag, I'd hate to be forced into selling this one here despite arguably it isn't a potential 10x bagger...
ReplyDeleteBSBR - Does that qualify as a hammer? Volume has been impressive.
Life imitating 2nd?
ReplyDeletehttp://goldstocksforex.com/2014/01/25/the-rolling-stones-gimme-shelter-with-lisa-fischer/
It just goes to show how much we were influenced by music growing up in the Sixties.
DeleteI think CT is reading your posts. LOL!
DeleteI've never heard this take befor
ReplyDeleteI've been following you for years ever since I found you on TOS back in 2007. I love your disciplined and thoughtful approach to understanding the markets. Thanks for the great work. Anyway, my question...
I often hear you say liquidation breaks strengthen the market. Could you describe why this is the case in conceptual terms and how it relates to the different timeframes (day vs longer term money).
Thanks,
Andrew J. from Bozeman, MT
Perfect question in the context of the strong break the markets have just had over the last couple of days.
A liquidation break is simply a sharp move that is against the current, prevailing trend. It is often very sudden and has very quick tempo, often sucking in day timeframe players into thinking that it's going to continue further and then indeed doesn't. The selling that is happening is what we would refer to as "old business" as it's people who are already long from earlier. New business type selling is when new shorts come into the market and establish a position. In a classic liquidation break, it is only the most recent buyers who are liquidating. Therefore, inventory just needs to balance a little and the trend resumes soon after with no follow through at all to the downside. These buyers are usually of the day timeframe and could be possibly scalpers, overnight futures traders, or momentum players. Their timeframe outlook is very short, so when they don't get satisfaction right away, they are out of there.
So, why do these breaks strengthen the market. Simply because they take potential sellers out. The only way to get out of a long is by selling it. Think of everyone who is long as a potential seller at some point. If the market is overly long then it is that much more susceptible to a selloff. If inventory is more balanced, then the odds are lower. It's not much different from whomever manages the inventory at your local Wal-mart realizing that they ordered too many vacuum cleaners and they're piled up in the back. Vacuum cleaners will soon be on sale right up front.
The second part of your question deals with timeframes and this is also very important. When thinking of the different timeframe players, think of how long their holding period usually is and that will tell you how long the liquidation break could go on for. The aforementioned momentum players who operate in the day timeframe can bail out of their positions very quickly and such a break can be over in minutes. Intermediate and long term traders who may be in the market for weeks to months to years will take much longer to liquidate their positions and a break can last longer.
This is from shadow traders website
DeleteI haven't either but only hindsight would tell us if this is a liquidation break or not.
DeleteRight, sounds feasible. I'll finally believe it once I see it, though.
DeleteI'm not seeing follow-through at the moment, wonder what shorts are thinking tonight....
DeleteAnother one from schaeffers
ReplyDeletehttp://stks.co/h0D65
UHS - Want 7%? I bet you can get it with this one.
ReplyDeleteVG - I was in this one at $2.77, and gave up. Now look at it.....
ReplyDeleteCarlos Slim died today, in a fall.
ReplyDeleteMexican peso chart downside breakout on tap.
Seems like a race to the bottom in progress, for South America.
That's the same phenomenon we've seen for Canada for a year now.
Hehe it's Karl slym
DeleteWow hw and bldr both have been monster winners.
ReplyDeleteI remember when we were looking at this in early 2012 as we speculated that the housing sector was bottoming. It's been 2 years and the rally continues. These stocks that went thru massive downturns have slowly creeped higher and higher. Just like LNG or ades. I think aa is also another one that will have a similar chart in a year or two
DeleteLots of housing related stocks have done really well and housing really hasn't fully rebounded yet. U.S. is still building less than almost anytime in the last 50 years:
Deletehttp://www.calculatedriskblog.com/2013/08/new-home-sales-decline-sharply-to.html
The catch is a lot of housing related companies (like lumber for example) are quite expensive on current metrics so have built a lot of the upcoming expected growth into their stock prices already, so the way to win is to figure out if housing will actually be better or worse than the stock prices are thinking - not easy.
We have the obligatory 'dead cat' this morning (one of many 'backstops' to buying panic). EEM currently bidding 38.42, about a +0.5% premium to Friday's close. I have unloaded partial positions premarket, and will unload all remaining positions during the open and/or 1030 am trading window for Rydex funds
ReplyDeleteShark's stock of the week: NFLX!
ReplyDelete'Probably the best big cap earnings report so far this quarter has been from Netflix, Inc. (NFLX) which is our Stock of the Week. NFLX is the leader in providing internet television services. It is growing extremely rapidly and is expected to double its earnings per share to $4.01 in 2014. The company is expanded rapidly overseas and, while this has been a drag on current earnings, it is going to produce tremendous growth in the future.
'There are plenty of bears who question NFLX’s valuation and business model but this is a classic big cap momentum situation. The fact that there are skeptics is one of the things that will help keep it running.
'With the overall market presently in turmoil momentum traders will be looking for the stocks that have held up the best recently. NFLX will be at the top of that list.
'As always we would not chase a gap-up on Monday morning but would look for a strong close probably over the $390 level. We’d keep a stop under the $380 mark which is the December highs. The overall market is problematic and all positions need to be managed carefully right now.'
I've been watching 'Love/Hate,' a stand-out Irish crime series. Three seasons available for streaming on NFLX.
DeleteBDI - Baltic Dry Index falls to 1,217 , down 29 27/01/2014
ReplyDeletehttp://www.hellenicshippingnews.com/News.aspx?ElementName=DryBulkMarket&Page=1
Check out the FTSE. The UK stock exchange hit a 52-wk high January 21, and has now plunged 300 points in 2 days.
ReplyDelete-2% on 75k shares.....
ReplyDeletePretty optimistic report out today from nordea bank on the shipping industry. They said the dry bulk market is at the beginning of a two year or more rally. They were pretty take on their expectations for rates rising...about 15% for 2014 and same for 2015. They said could be significant scrapping with 25% of fleet being 15 years old or more (13% is 20 years old or more).
DeleteI think their rate estimates will be very conservative but that's generally what you see as a cycle bottoms out because people don't want to look foolish in calling for a big rally.
I don't think you've seen close to a peak given only a couple of companies turned breakeven so far in this rally. When everyone is making gobs of money and people are expecting 50% increases in rates the. It's time to start looking for tops
Weird..I meant to say they were pretty conservative in their estimates for rates
DeleteS&p on pace for $29 EPS for q4. 29 x 4 = 116.
ReplyDeleteFine ill do the rest of the math for you guys jeez you're so demanding.
Delete1800 / 116 = 15.5
BALT - Okay, planning to add back my 2nd half this afternoon. Hopefully it comes off some as the dip-flippers take their gains.
ReplyDelete80/20 rule remains in effect, with the customary slight dip under 20, in this case. How comical, I guess we must be playing hard-ball.
DeleteMagic Software (MGIC) down 10% this morning on no news. Always love it when that happens, especially with a foreign company. You don't know if there is some inside news out there or maybe just a hedge fund getting a margin call.
ReplyDeleteHappy that I sold half last week at $8.62.
Yeah, that was a bear-flag formation.
DeleteYen - I guess if the yen begins lifting then we're bound to experience flat/weakness during the interim.
ReplyDeleteBALT - Seems like more volume on dips and volume fades as price lifts, like accumulation. Today could be the holding pattern reversal. If BDI jumps, we won't be here long.....
ReplyDeleteMCP - Could be an entry, I still don't get the attraction to this one.
ReplyDeleteNIHD - Good thing we didn't stay in this one, was thinking it looked like a bull flag since it was moving in favor of bears following the flag pole. Is the gap up closed yet?
ReplyDeletenew post
ReplyDelete