Monday, January 27, 2014
1/27/14 Ballad of a Thin Man
Trading is tactical. I don't pretend to know which shots across the bow are bluffs.
(a) The 'taper.' From a common sense point of view, does anyone really believe a pullback of a few billion in Treasury purchases matters? There are plenty of other reasons to be worried.
(b) Reversal of the yen-carry trade. Since the onset of 'Abenomics,' it's been profitable to short the yen, and use the proceeds to invest in the US and Europe. Abenomics fueled a +50% rally in the Nikkei in 2013. Unsustainable either in sentiment or based on economic reality.
(c) China's shadow banking system. Yet to be officially recognized as a crisis, but the writing's on the wall. (Note that the (UK) FTSE stock exchange is down over -4% in two days, not least due to a crash in the stock price of HSBC.)
(d) Emerging markets? I'm not entirely sure they are the main problem. Foreign indexes are breaking down, but they may simply be symptoms of larger structural problems in developing economies.
Symptoms always attract the most attention. The underlying cause(s) require(s) more investigation and/or deduction. Something is happening, but we don't know what it is.
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ReplyDeletePus Led Zeppelin won a Grammy for best Rock Album and Black Sabbath for Metal Performance in 2013 - something very strange is happening.
Toss in that there's a Karl Slym and a Carlos Slim and I'm at a loss for words
DeleteI'm horrible at calling short term moves in the market so take this with a grain of salt, but i would be careful getting too bearish. I have seen everyone flip to scared/bearish from a 4% drop. VIX is up 61% in a week or so.
ReplyDeleteThe market usually gives us one additional opportunity to get out before it plunges for real. I would take it.
ReplyDeleteDepends on your time frame right?
DeleteHas Japan recently come under heavy fire for Abe's economic policy? Korea/KOSPI - KB and PKX are still coming back to us, I kinda think of Korea as being a leading indicator for Asia (China especially)?
ReplyDeleteRinse and repeat, can't shake the feeling someone somewhere will "reaffirm commitments" while dancing a special podium jig in AH just as oversold indicators are peaking and in response, global markets will gap up burning shorts a new one.....
In, 3,2,1.....
I think if you consider the sentiment of people with regards to emerging markets, at some point this year it will come to a head where people want absolutely nothing to do with them and it will set the stage for a very good rally. Valuations matter and they're dirt cheap in a lot of emerging markets. The MSCI Emerging Markets index is trading at under 11 p/e vs historical averages of 15.5. I don't know when it will turn but I'm willing to bet that at some point over the next 5 years it trades at 15.5 times earnings again. Remember that with 5 years of just 5% EPS growth from emerging markets, the denominator grows by 28%. When coupled with a move from irrational pricing (i.e 10x earnings) to normalized pricing (15.5x) you get another 42% boost.
DeleteWhen factored together you get a 81% return in 5 years. And that's ignoring the 2% yield you're getting.
I don't know if EEM is the best option for playing this (given its exposure to Samsung and TSM for example) but you get my point.
DeleteI think I prefer TSM over INTC
Delete(a) VWO was closed near the open @ 37.98 (now bidding 37.47).
ReplyDelete(b) ECH was closed near the open @ 42.89 (now bidding 42.30).
(c) FXI was premarket @ 34.33 (now bidding 34.10).
(d) FCX was closed premarket @ 32.89 (now bidding 32.20).
(e) BSBR closed premarket @ 5.08.
(f) RYWVX closed the 1030 am window @ 11.51 (-1% from Friday's close). Based on the current bid for EEM (37.82, or -1.09%), RYWVX may close the day far lower.
As always, taking gains/losses immediately when outlook changes will yield the best results. Buying on panic Friday also helped to minimize the damage. Total change in portfolio value -0.01%. Now back to 100% cash.
When does the FED next poke their head out of the ground, this week or next?
ReplyDeletewow what a reversal for nat gas futures traders. anyone looking for a date with UGAZ? better bring some dramamine
ReplyDeleteHIMX continues to kill it
ReplyDeleteLooks like an ih&s forming.
DeleteI can also understand why the LCD driver won't be integrated into the main processor, fixing it onto the display would eliminate wiring complexity enormously.
DeleteThe only way that might change is if the main processor itself was mounted onto the display, then the driver could be integrated into the main processor.
AA - Not very red today...
ReplyDeleteThe pullback in GDXJ on a 6-month chart looks pretty dramatic. It will probably shake out all weak hands. In case it is just a pullback in a new uptrend, I just purchased an August $32 call at $5.90. I won't add to this position anymore, so as not to repeat the mistakes of the past (adding on the way down into an abyss).
ReplyDeleteWhich direction is the longer term trend?
DeleteEven if the long-term trend would be up, it would still be a dangerous game, as the trend can change at any time and we will only know after the fact. So I am looking at a 6-month chart, and if it starts making lower lows, I will be out. More specifically, if GDXJ drops below its January 14th low, I'll quit these calls. For the GLD calls I picked up last week, I'll be out if GLD drops below January 22 low.
DeleteSo far golds are in the 'process' of forming a bottom/transitional pattern. Put in your moving averages.
DeleteGold and jr miners long downtrend, forming bottom, MA's flip positive, forming cup and handle with pullback.. Click my image. Classic transitional pattern with weak equities, strong bonds, weak TBT. subject to change of course. Seemed to start around the time Yellen was confirmed.
DeleteHoly shit look at AAPL: $45.5 Billion in free cash flow last year. They have almost $150 Billion in cash. That's preposterous. And yet it trades at 13.8 times PY earnings.
ReplyDeleteSo what's your point, are they going to blow it on the underground NSA-style castle?
Deletei think it's interesting that the most valuable company in the world and one that is directly tied to consumer spending is cheap. don't know exactly what that means...
DeleteIf they were smart, they'd put that money to good use in my bank account.
DeleteLooks like the same formation as Aug/Sept
DeleteHow about if AAPL doubles from here, to $1100?
DeleteBALT - We might even retain our parallel channel. The lower low doesn't thrill me, almost looks like we had some unfinished business remaining there from early December.
ReplyDeleteDefinitely a channel forming on the linear chart since the March 2013 highs. You can draw a line through that high and the others after it and copy that line and paste it through the lows from June 2013.
DeleteCXO - Concho-mama made a cup today, or should it be called a hammer with fake downside penetration of the pendant? Buying here would be buying the lower trend line in anticipation of a retest of the upper trend line and a potential upside breakout of the pendant?
ReplyDeleteXIN - Could be good, OINK - The pig hasn't been slaughtered, and CYD the wheels haven't completely fallen off.
ReplyDeleteThe problem with AAPL is it is making great earnings now, but also has very high margins. It is hard to see how AAPL maintains these margins with Google coming out with their $200ish unlocked phones and many sub-$100 phones available from China. Same on the tablet side. They've been doing fine as the market has been growing so quickly, but as the market matures, they are going to have to make some hard decisions on price vs. margin vs. volume and none of them are good.
ReplyDeleteI agree and its part of why I avoided it but I would think the valuation makes up for that and then some. By comparison:
DeleteBack in 99 MSFT had a $600 Billion market cap and only $30 Billion in cash and $9.5 Billion in Net Income.
AAPL has a $500 Billion mkt cap, $150 Billion in cash, and $37 Billion in net income
I guess we will see in a few minutes how earnings are doing...
Wow, that's an amazing comparison.
DeleteAAPL down about 5% after hours should add to the weakness in the market.
DeleteDavid,
ReplyDeleteI look at the GLD, GDX and GDXJ 6 month charts and they also sure look like downtrends to me?
I agree. Not sure what David is seeing.
DeleteThe way I look at it, both BALT and NM held the bottom of the uptrends they've been in for over a year. A bounce now would be great, but seem a lot of these break down a few percent before starting back up again, so I wouldn't be too quick to sell, especially if the fundamental story seems to be intact, with some Baltic Index worries.
ReplyDeleteValue guy Tim Melvin liking BALT:
Deletehttp://investorplace.com/2014/01/bargain-stocks-balt-ap/#.UubSABAo6Uk
Looks like 1,650 is a more reasonable target in the market should support at 1765 not hold
ReplyDeleteActually 1725 is the next stop
DeleteI personally wouldn't pay more than 6 or 7 times earnings for AAPL. Not that the company is in decline, but I just see huge risk to their earnings going forward and it sounds like none of the new things they are working on can offset this.
ReplyDeleteApple TV - you can buy a Google Chromecaster for under $40 and it works great.
I-watch - seems like they are behind on this now and people are moving to the NIke Fuel, etc.
Maybe they have something else up their sleeve, but I wouldn't buy the stock hoping for that.
the issue with any consumer company is consumers' tastes are fickle. having said that, the "ecosystem" they have created adds significant value to them and I think it should be worth more than a typical cycle company should trade at its highs (i.e., 7-8 times peak earnings). i think a lot of people will continue to convert over to Macs over time. i'm glad i switched to a macbook...its the best computer i've ever had by a long shot.
Deletewow AAPL about to go sub $500.
DeleteA DT kind of map.
ReplyDeletehttp://www.yahoo.com/food/booze-map-of-the-world-crushes-our-spirits-74417073147.html
I'm thinking of buying a bottle of brandy for insight into the China perspective.
Clear fingernail polish will help preserve the lettering on your keyboard keys.
ReplyDeleteNM - This one hasn't even come back to it's trend line yet, ~$8.25 Why hasn't it, if things are so bad?
ReplyDeleteCH - Sheesh, finally this one has given up some gains, was wondering how far they'd run it up. LOL!
TAXI - Hey Ignakowski, WTF!?!?
I remember days a few years ago when AAPL would tank after hours and Tim Knight would mock bulls only to have it open higher in his face. Wonder if he will be mocking bulls again.
ReplyDeleteMy guess is yes, but I would rather have entered around $400
DeleteLong writeup on PEIX:
ReplyDeletehttp://oilandgas-investments.com/wp-content/uploads/2013/07/Bulletin-143-Pacific-Ethanol.pdf
Not sure how long it will take to digest that quantity of sugar, but both corn and sugar are subsidized. I think that guy doesn't have another part of the story factored, or I missed it while reading:
Deletehttp://farmfutures.com/story-cash-king-8-107291-spx_1
Bottoming tail in /NKD (Nikkei futures) today right at the trendline from early June lows (and Aug & Nov lows). Kind of looks like an ascending triangle pattern to me which is one of the few I pay attention to just because it seems a little more reliable.
ReplyDeleteGotta wonder if today and/or this week is setting up for a bear trap.
ReplyDeletei turned on CNBC to listen to the two shows with seemingly the most emotional people (Fast Money and Mad Money) to get a sense of their take on today. I didn't really come away with any big reads but Cramer just did a great 3 minute segment on tips for when to be selling a stock. I'd recommend going to CNBC.com to check it out. It was around 6:53 EST. They usually post it about 30 minutes to an hour afterward.
ReplyDeleteDoes anyone really 'understand' the mining sector?
ReplyDeletehttp://finance.yahoo.com/echarts?s=GDX+Interactive#symbol=gdx;range=5d;compare=;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
In 5 days it's juked traders into buying and selling hundreds of millions of shares, only to end up where it started.
I don't understand how to value Gold/Silver. That's why I've never ventured into these guys.
DeleteWell, there are lots of guys who have made billions off mining, so obviously they would, but your really just talking about traders here and a lot of traders are trying to catch the bottom in mining as, when it does come, it will be a great time to make money. But a lot of those traders are just as quick to bail if it doesn't look like the bottom, so lots of volatility.
DeleteFor me, I think if if you want to invest in mining now, you take a basket approach, get smart management and average in over time. I bought that IVN.TO last week, which now looks like a mistake, but I'm really hoping the mining sector comes down more as I would like to get LUN.TO, maybe a TCK or a CCJ.
CEO of Bitcoin exchange arrested in connection with Silk Road?
ReplyDeleteWhat happens when the FED stops paying interest on reserves, is that their exit plan?
I've noticed when Ron Paul speaks about the value of the $US and FED policy, PM's tend to crash.
ReplyDeleteAAPL's issue with the MAC is the same as with the iphone. It is really hard to continue to justify their premium pricing. Got a Windows 8 laptop for $550 last year and Windows 8.1 is now working quite well for me and the thing is super fast and great coming out of sleep mode. Not sure what a MAC could do for me, but I'm very happy with this.
ReplyDeleteMy wife has an iPhone and Ipad and she loves them, but we are both coming up for our cell phone contract renewals and even she is having a tough time justifying the $249 for an iphone (on contract) as opposed to a free Google phone. If we do start getting the Chinese $100 phones in North America, Apple and Samsung are going to get squeezed, especially with the creative pricing t-mobile is coming out with.
Yeah I agree their premium pricing will be harder to justify for certain products. But we bought my wife a new computer last year and opted for the cheaper Lenovo ($800) and it's horrible. And my experience with PCs has always been poor (lots of rebooting, blue screens, incompatible software etc). I've never experienced any of these issues with macbook in 2 years of owning one.
DeleteI bought just a standard HP. The first version of Windows 8 was dumb in a lot of ways, but the hardware in this machine really is excellent. Windows 8.1 improved things, but I really just use it as an old-style, non-tablet PC, so perhaps your wife's doing different things.
DeleteThe other way I look at it is for $550, it's pretty easy to justify buying a new one every couple of years, so always keep high performance new technology. I think you see that with phones. If I can knock my cell contract down by $20 a month by not getting a phone subsidy and then buying a new Android phone every year for $100, I'd always have the fastest performance and save money.
I think the PC platform hardware is pretty robust, it's the MSFT operating system that's unreliable. One nice feature I hear about Mac's is the operating system upgrades are free, where the PS upgrades are essentially available with new hardware?
ReplyDeleteWho's making the GOOG phone CPU, I think it's the MOTOROLA design group bought by GOOG but who's fab, TSM? That's DROID, right?
yeah its the fact that you have so many different companies meddling with the software/operating system that was always frustrating to me. i hear brent's argument about the phones and it may actually be something we will consider when my wife has to get a new phone.
DeleteARII - Wasn't crushed Friday, tempting late comers? Certainly took one on the chin today, though.
ReplyDeleteThe tanker cars will need safety upgrades, ARII owns some portion of the rental fleet I think, as well as manufacturing them.
Not sure who/if some other company actually makes the tanks for the cars.
ENPH - SMA200 is holding so far.
ReplyDeleteREDF - Tagged 52wk low
TTM - Coming back to us.
ReplyDeleteHow bad can Puerto Rico really be?
ReplyDeletehttp://finance.yahoo.com/echarts?s=BPOP+Interactive#symbol=bpop;range=2y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
Interesting. All you hear is about the mess Puerto Rico is in. Good to see their banks are doing well. Usually the banks go with the economy.
DeleteFBP is another, smaller one. Now testing the double bottom. Wanna bet it doesn't fail? So far, no new low so I dunno, maybe if it does make a new low, more downside coming?
DeleteI don't know man it still looks like the Shanghai Composite is bottoming here.
ReplyDeleteBAP - Peru - This one isn't exactly tanking, either.
ReplyDeleteSCCO isn't trading under $25, it's nearly $28
Shanghai - Yeah, might not make it to 1800, considering the attention the subject is receiving.
And, can't we expect we're the last to know when something's happening, whatever happened to that?
Brazilian iron ore export to China hit record:
http://www.hellenicshippingnews.com/News.aspx?ElementName=DryBulkMarket&Page=1
CH - Look at the volume on this thing.
ReplyDeleteBSBR - Sure looks like an H&S breakdown, this is keeping me from adding.
ReplyDeleteBaltic Dry Index falls to 1,177 , down 40
ReplyDeleteBSBR - That's much better. Let's go, let's go, let's go, let's go!!!!
ReplyDeleteBALT - Last chance for romance?
ReplyDeleteRoller skating rink?
DeleteThere, and across the globe.... Tonight! :)
Delete1825 - "Short the back kiss."
ReplyDelete"200 EMA back kiss"
DeleteUSPS banking - This is what I wanted to see during the crash, someone to provide the masses with banking services, bypassing the worthless greedy bastards.
ReplyDeleteFYI, objectivetrader's new site is working: http://chinwagtraders.com/
ReplyDeleteYou have to set up an account, but seems to be no problem.
Will check it out, thx.
DeletePete Seeger Born 1919 Remember singing his songs, brought smiles to so many faces.
ReplyDeleteWilbur Ross saying almost time to invest in China:
ReplyDeletehttp://www.cnbc.com/id/101366393
Chart is showing classic signs of a bottom
DeleteThe sky is falling again for the 18th billionth time this week, listen to the peanut-gallery wisdom (quietly distributing their gold into any strength) and running for cover?!?!?!?!
DeleteI wouldn't be surprised to see one or two more tests of recent lows even if we go higher
DeleteNot sure if I'm reading it right but X did +$0.27 vs -$0.25 estimate.
ReplyDeleteWow no one believes in a bounce from what I'm gathering in looking at traders' notes. My guess from last Friday on where it trades still makes a lot of sense: 3 or 4 days of up / down / up / down to get it looking like a bear flag and get everyone really bearish and then a slow creep higher to old highs with a breakout to new highs within 3 or 4 weeks.
ReplyDeleteJust thinking out loud in terms of sentiment and where to get the majority of shorter term traders on the wrong side of the boat...this setup seems the most logical to me.
DeleteAGO - The ih&s looks like a target of $30, head mid-Oct.
ReplyDeleteYesterday, I regretted adding back the second half of BALT, and today is no different.
ReplyDeleteJCP - I dunno, has this one bottomed?
Comcast - Average customer bill is $164
ReplyDeleteI haven't heard anyone mention this but could it be that the Baltic Dry Index is simply backtesting the prior resistance of around 1140 to 1170? that was significant resistance for 18 months:
ReplyDeletehttp://www.bloomberg.com/quote/BDIY:IND/chart
BALT - Out at $5.42, hoping to pick them back up lower, tomorrow.
ReplyDeleteChinese coal mine investors receiving bailout?
ReplyDeletehttp://www.theedgemalaysia.com/in-the-edge-financial-daily-today/273019-china-credit-trusts-reaches-pact-on-troubled-product-.html
NIHD - Should we be jumping on a potential short covering squeeze? Considering two months of higher lows, past few days are all in their favor looking like bull flag should they be taking their gains?
ReplyDeleteIsn't there something about this one that makes you think the rug is just about to be pulled out?
Deleteyeah probably. i think it rallies at some point on the back of their spectrum assets. balance sheet is horrible. CLWR rallied hard after crashing to like $0.80 or something after people started bidding on their spectrum assets.
Delete"Isn't there something about this one that makes you think the rug is just about to be pulled out?"
DeleteNo kidding, it sure does! I recall FTWR has spectrum assets as well, not sure why they couldn't leverage them, I'm guessing vultures circled until spectrum licenses expired, or there wasn't anything of value there to begin with.
I was just looking at the chart thinking the bull flag looks ready to pop, in fact it's so overextended to an extend it makes me think it may just take a big swan dive from here. If that happens maybe short covering kicks in lower?
Nothing ventured, nothing lost! :)
Wow Jeff Immelt bought $1 Million GE stock yesterday
ReplyDeleteAbout time, he probably got it free somehow. AGCO's Director SRINIVASAN MALLIKA has bought considerably more than that. Maybe this guy has sold a buttload of tractors to the Ukrane, Can't imagine where else he may have sold them?
Delete"I agree. Not sure what David is seeing."
ReplyDeleteI made an assumption that the double bottom in GDXJ in December will hold for the next few months at least. Under that assumption, the pullback of the last few days should have shaken out the weak hands and prepared GDXJ either for a dead cat bounce or for a move to new post-December highs. I am moving my stop on GDXJ calls to today's mid-day bottom at $34.60.
BALT Early sell offs getting bought sounds bullish, to me.
ReplyDeleteEEM moving up in the after hours on the Turkey rise in rates.
ReplyDeletesaw that. lots of people bearish on EEM
Deletehttp://video.cnbc.com/gallery/?video=3000239048
ReplyDeletehe mentioned materials / commodities. I just looked at the 20 year monthly oil chart and it seems pretty bullish to me.
JNUG C&H
ReplyDeletenice call. you gotta have balls of steel to play a 3X play like that in the midst of a huge down trend, but that's what we were doing with FAS 5 years ago i guess.
DeleteGod, I remember being in and out of FAS is like 2 minutes at the bottom.
Deleteyeah that was a nutty period. i looked back at the prices of some of those stocks i bought. i split all of my money equally between WFC, USB, WYN, CBS all literally on the day of the lows. I tripled my money in like a 2 or 3 weeks I think. what a crazy time.
DeleteAll I have to say is WTF:
ReplyDelete"5. You can rent a boyfriend
Lunar New Year can be rough for singles, especially females.
Many family reunions are highlighted by dreaded interrogations of singles who haven't settled down.
Now there's a solution -- boyfriend rentals.
China's largest online retailer, Taobao, has a section for fake boyfriend rentals, so parents and relatives can finally stop nagging.
Renting a bogus marriage prospect ranges from RMB 500 ($82) to 8,000 ($1,321) per day.
The package comes with "a free embrace, hand holding and a goodbye kiss on the cheek," as well as a list of additional specific service charges.
According to People's Daily, dinner costs RMB 50 ($8) an hour and a trip to the movies is RMB 30 ($5) -- double if it's a thriller."
You think it would be the other way with everyone trying to havee sons, but that'd be called prostitution!
DeleteNMM, the mainly dry bulk, income oriented part of Navios reported today. Looks like earnings missed by $0.01, but EBITDA basically flat after special income removed from last year and the said:
ReplyDeleteAngeliki Frangou, Chairman and Chief Executive Officer of Navios Partners, stated: "Navios Partners previously announced that it was committed to a minimum distribution of $1.77 through 2014 and today extends this through the year 2015. Moreover, as drybulk shipping recovers and the charter rates improve, we will be positioned to increase distributions in the medium term."
chinwagtraders.com has some interesting charts out today - worth putting on your reading list.
ReplyDeleteBaltic Dry Index falls to 1,148 , down 29
ReplyDeletehttp://www.hellenicshippingnews.com/News.aspx?ElementName=DryBulkMarket&Page=1
Noticing a lot of retail stocks are down.
ReplyDeleteThe questions is whether it is just due to the bad weather, in which case they should be good buys, or if it really is a shift more towards web-buying. The Starbucks CEO thinks it is the latter, but really hard to know.
I think it's both, internet buying has been eating away at the model and cold weather = Higher heating bills(fear of) + travel issues.
DeleteSounds like grocery stores have been doing a brisk business, each storm coming strips the shelves bare.
BSBR - $4.79 is 52wk low, but they've been returning cash so should go lower.
ReplyDeleteBrent - did you get a chance to listen to the NMM call?
ReplyDeleteNope. Earnings out from 1-800 Flowers this morning and I've been working on that and have a bid in.
DeleteThey are getting things going better, have no debt and are repurchasing shares. Plus they should do better as the economy improves and with their web presence.
Knockout punch ahead of FED release?
ReplyDeleteHigher lows for BALT this week.... hmm
BA/T/YHOO - Disappoints?
TOF- I agree man. WTF?? Why pay double if the movie is a thriller? Crazy chit over there.
ReplyDeleteOnly in China. I have some crazy stories from when I went there on a two week trip to visit manufacturing plants back in 2004. Weirdest one was when I was in a bar/music venue with the buying agent I toured the factories with. We went with a group of guys and about 15 minutes after being there a long line of girls came out in front of our tables and there was a "manager" woman that asked each of us which one we wanted. Everyone picked out a girl and the girl just spent the rest of the evening sitting by each of us, asking us if we wanted to play an games. They gave me a really good looking girl that didn't speak a lick of english. At the end of the night they all asked if we wanted to take them back to wherever we were going. I declined but a few of the guys took some of them home. It was bizarre. I kept thinking maybe I went to a brothel but we were there to see a band play and it was right in a big mall right next to the hotel we were staying at.
DeleteYou made the right call cause you gal was a guy!
DeleteNot sure what to do here. Probably just sit tight and see how things shake out the rest of the week.
Can't decide between shit my pants or jump out of my window.
DeleteIt's like that in Japan too, Philipino boys with sex-change operations in some places(most always disclosed). Nobody goes home though, as far as I know.
DeleteKB - Green, PKX holding up well.
ReplyDeleteBest I can tell, we rally in EM's, seems like few sellers. Or, dip buyers about to get hosed?
YRCW/GMO/MITK all green. Figures.
ReplyDeleteI really hate how on some stocks, the market makers grab everything which is going to hit your bid and stop you from getting filled.
ReplyDeleteBAS - Looks like bull flag forming, to me.
ReplyDeleteRevenge Porn? Why is it new legislation seems to appear only after life's idiosyncrasies touch the lives of politicians and not before?
ReplyDeleteNIHD - Just doesn't seem to be heading lower anymore.
ReplyDeleteAAPL - $500 here, line in the sand I guess?
DeleteMCP - People actually buy this thing for some compelling reason I can't comprehend, perhaps as an gambling vehicle?
PEIX - Is the run done, when does the upside explosion occur?
PEIX: Corn looks like it is ready to rally which could be a problem for them.
DeleteDid you see the article I linked yesterday advising farmers go to cash for a few years? I think Congress has to pass the farm bill due to downside price pressure is gonna make life rough on them.
DeleteCLNE - Of course, following the SOTU!
ReplyDeletePEIX - Farm bill must be good to go, Never fruit subsidies though, just engineered starch corn for hydrogenated junk "food"...
ReplyDeleteEM's - Seems like raising rates may not be what the market wants, higher rates tend to force discipline as opposed to encourage speculation and slow money flow?
ReplyDeleteVALE - Up strong, and our bulkers are holding up well. Could be BDI bottom is near?
ReplyDeleteAA - You're gonna want to see a new high, not a lower high.
ReplyDeleteBALT - Everyday this thing climbs out of the hole, this action has to be bullish.
ReplyDeleteNMM - Do you guys know if these guys SPOT, like BALT? Not exactly a "terrible" response so far today.. Beginning to wonder if once this bout of (manufactured?) EM fear blows over these bulkers leave bystanders sitting on the dock of the bay.
ReplyDeleteThey are more conservative and try and lock in a good portion of their revenues to offset their costs.
Delete"Navios Partners has entered into medium to long-term time charter-out agreements for its vessels with a remaining average term of 3.4 years, providing a stable base of revenue and distributable cash flow. Navios Partners has currently contracted out 74.7% of its available days for 2014, 52.6% for 2015 and 41.5% for 2016, expecting to generate revenues of approximately $197.8 million, $163.5 million and $138.1 million, respectively. The average expected daily charter-out rate for the fleet is $24,233 for 2014, $28,384 for 2015 and $30,324 for 2016. "
Okay, thanks. So NMM may find themselves trapped in lower revenue contracts if the BDI takes off.
DeleteOne more thing that I was doing wrong for the past 2 years is that I stopped trading daily swings, hoping to strike a home run. So in order to have some "trading" money, I am preparing to take off my GDXJ calls today if GDX breaks intraday support at $23.65 -- in a few seconds, that is. :) For all we know this dead cat bounce could be over. And if it isn't, my remaining positions in this sector will do well.
ReplyDeleteI have just discovered that my August GDXJ calls were not the shortest-dated calls in my account -- I had June GDX calls, which I purchased at $2.90 a couple of weeks ago when GDX was at $22.50. So I just sold those calls at $3.60.
DeleteI'll sell my GDXJ & GLD calls if Monday's low is broken...
DeleteActually, since my GDXJ call has such a large bid-ask spread, I figured that I'll try selling it today, while I still have some profit in it and don't have to chase the bid on the way down. So I just placed a sell limit order for it at $6.60 (purchased the call at $5.90), so as to make enough for a decent Dim Sum lunch for my family. :)
DeleteGot the FLWS on this pullback - full size position.
ReplyDeleteIt's not really a value stock for me, but more of a growth and good story at a reasonable price.
They've been expanding out of flowers and now have 3 divisions (all growing), with the gourmet foods and gift baskets now the largest. They are doing things to improve margins, bought back 2% of their stock last year and plan more in 2014, have no debt and have been profitable except 2009.
My thinking is that as the economy improves, demand for their products grow, plus their expanding product line also helps and, if the trend to web shopping really is accelerating (and many countries have much higher percent of online shopping than the US), they should be well-positioned in their niche to generate strong profits and generate a high multiple.
Unlike a lot of my recent purchases, this is one that has the potential to double over the next 2 or 3 years.
That approach seems sound, to me.
DeleteI've looked at FLWS before. I don't recall what kept me out before...I think it was just because I didn't see much upside before. I like the idea that they are getting into related products. Kind of a no brainer and easy way to increase order totals
DeleteCould be orderly selling as a result of forced liquidations on behalf of cash-strapped banks required to increase reserves?
ReplyDeleteCP - I'm probably going to ramble here but these are my thoughts on everything going on:
ReplyDeleteThe only one that is fully tethered to spot rates that I can find is BALT. All others have a varying degree of leverage to it - I believe GNK is one of the higher leveraged ones to it. There is obviously a lot of risk if rates crash and this recent crash since December is really nasty. In fact its the sharpest correction I can find in the history of the Baltic Dry Index. Having said that, the average rate this quarter is still about 45% higher than last year.
I think there are a lot of mixed signals going on right now. When you read analysts comments you get such a wide range of takes on the spot rate that it will make your head spin. Some say that the supply of ships is still choking the market, that iron ore stocking was way too high at the end of last year, and that more supply is coming on board. Others are saying that supply is finally in line with demand, that this is a seasonal lull, and that the longer term picture is bright due to expectation of continued scrapping going forward and iron ore demand from China and India. My take is that no one knows and if they say they do they're bullshitting people.
One of the things I like to focus on is the sentiment of investors and analysts during sector turnarounds. It's really hard to put a value on this but generally the cycle is extreme bearishness at the bottom, followed by a rally that leaves a lot of doubters about the sustainability of the rally. There is typically a big shakeout period around this time, exacerbated by short term issues related to external factors or company specific factors, which further increases people's skepticism. If the rally continues it generally puts in a floor when things still look like shit and people are expecting more downside in the stocks of that sector. The downside doesn't come and another rally ensues and those people that were previously really bullish are sitting on the outside looking in, waiting for the inevitable fall that seems so obvious to be coming. Eventually some of those people jump in at higher prices while others think there's no fundamental reason for the rally and they short it. Both add fuel to the upside.
I don't know if this is just a seasonal lull or not. I'm concerned as everyone else is that the recent crash is more than just a seasonal one. But I still think there are a few factors at work that are extremely bullish longer term:
*Demand from China and India, a population of over 2 Billion people, is going to continue for years and years
*Lots of companies and banks in the sector got burned for the past 5 years and I think they're skeptical of any rallies and they will look to remain cautious (ie supply will be constrained)
*Investor sentiment seems to be in the skeptical/bearish phase, most people either wondering if the rally was a mirage or waiting for a further drop in prices to consider entering, leaving lots of potential future buyers on the sidelines
*The latest emerging market crisis adds to the skepticism which longer term is a good thing
*Most companies haven't made money in a long time in this industry and the wounds have been self inflicted. I think they're starting to realize this more and more.
Another thing:
Delete*This is a huge industry in terms of economic activity and yet the largest publicly traded company sports a market cap of only 1.4 Billion (DRYS). Most of the companies have $200 Million to $1 Billion market caps. These are the biggest public players in this industry:
http://finance.yahoo.com/quotes/DSX,NM,DRYS,BALT,SBLK,SB,SALT,EGLE,GNK;_ylc=X3oDMTMydjh1dHB2BGtleXcDRFNYLE5NLERSWVMsQkFMVCxTQkxLLFNCLFNBTFQsRUdMRSxHTksEbWlkA21lZGlhcXVvdGVzc2VhcmNoBHNlYwNnZXRxdW90ZXNidG4Ec2xrA211bHRpX3F1b3Rl
The combined market cap of these companies is under $6 Billion. For the amount of ships these companies own that seems crazy to me. Look at BALT. They own 15 ships I believe and their market cap is only $250 Million (fully diluted). That means the avg ship they own is worth $16 Million. Here is a longer term chart of the price of ships in each segment (BALT owns some of each):
http://l2.yimg.com/bt/api/res/1.2/LjCQ9YODgL8Bfpf4EPirhw--/YXBwaWQ9eW5ld3M7cT04NTt3PTYyMA--/http://globalfinance.zenfs.com/en_us/Finance/US_AHTTP_MarketRealist_HOS_LIVE/Dry_bulk_shipping_weekly_analysis-ea210e2e6998c64325bbe4027fa47fac
I can't find any prices below $20 Million for newbuilds and the majority of BALT's ships are new. How long this can last no one knows. But the replacement value of their fleet alone is probably double their market cap and they have one of the best balance sheets in the sector.
Re: NMM - They have the ability to convert some of their longer term contracts to spot contracts according to their investor presentation today (p.11/12):
ReplyDeletehttp://navios-mlp.irwebpage.com/NMM_Q4_2013_earnings_presentation.pdf
however, it's only 9%ish that they can convert at most. Longer term NMM has paid about $9 in dividends since inception (late 2007). While the stock has remained flat since then the total return is 50% to investors and that is at a favorable tax rate. That outperforms the overall market by a good deal (about 30 to 35%). The longer term chart actually looks like a cup and handle is forming with a near term target of $21 in sight. As recent as last Oct investors were getting a 12% yield. Pretty wild.
10 minutes till gold gets crushed.....
ReplyDeleteHow did you know, CP??? What was supposed to happen at 2pm EST and what did happen?
DeleteBA has $370B of backlog.
ReplyDeleteMakes decisions a little easier.
DeleteMy sell limit order for the GDXJ call was hit at $6.60. A nice family lunch is on me. :)
ReplyDeleteBSBR - Sheesh, I guess this one's gonna drop yet another $0.50, it's been straight down the tubes except for a brief fake bounce.
ReplyDeleteSLV seems to be slowly creeping up from its December lows. As long as those lows keep holding, I think it is worthwhile to have a position in the PM sector. So I have just added another 6500 shares of PNPFF at $0.32, recycling the money I made on GDX and GDXJ calls.
ReplyDeleteWho wants to take a wild ass guess as to the close? Either +200 or -300 is my guess.
ReplyDeleteTOF, what's special about today? Why all these swings???
DeleteToday is hump day dude!
DeleteYour still thinking about your missed opportunity on the wild side I see TOF.
DeleteLooks like market guessed right, another $10B to $65 is tightening, right? Means less cheap money sloshing around and into emerging markets?
DeleteI was hoping he'd announce the end of interest on reserves, so banks would be forced into risk for returns instead of sucking from the safety of the FED's teet(s).
Banks aren't winning b/c they're growing private businesses, they're winning b/c the FED is subsidizing them to not lend?
Sorta looks like gold has been rising since the beginning of the end of QE?
Folks, take a look at the weekly chart of CDNX:
ReplyDeletehttp://stockcharts.com/freecharts/gallery.html?$CDNX
A perfect double bottom over the past 6 months, a recent break above the highest point between the two bottoms and a decent pullback right after it. It could be a rocket ready to shoot up. If it does, then PNPFF will take off as well.
Oh my god look at UGAZ
ReplyDeleteTrying RH...
ReplyDeleteLong 300 @ 55.36.
Deleteyour obsession with this stock is getting creepy!
DeleteMade good money trading it twice now.
DeleteBut, that was a bear flag!!!!
DeleteI say flat today, down a little tomorrow, up a little on friday. gotta get that bearishness at some extremes before resuming higher.
ReplyDeleteNotice, folks, that SLV has also made what seems like a double bottom between last July and December. The fact that CDNX has led SLV to the upside since the second bottom, already rising above the highest point between the bottoms, is encouraging. Crappy stocks are supposed to lead the metals when risk is coming back into the sector. This is yet another answer to the question of what I am seeing in the PM sector now...
ReplyDeleteI might get excited once AUMN trades higher than SVM and MUX again.....
DeleteStarting to look like the end of a 4yr pump and dump operation.
ReplyDeleteSolar powered laptop - How revolutionary, they should patent that idea before announcing it b/c nobody would ever conceive something so unique and far out of the box, LOL. Now I know how management justifies their salaries....
ReplyDeleteMy email has been down since last night.
ReplyDeleteBOIL - Holy crap, have we already used the last few cubic feet of stored natty? Natty can't possibly be viable as a transition fuel if supply can't meet demand.....
ReplyDeleteAny way you slice it the move in nat gas has to be bullish for coal
DeleteEspecially true if these natty prices stick, I want to short natty near here b/c I doubt any shortage is lasting past another month and the STOU address probably had a lot of chasers excited today, isn't it reasonable to think they'll be getting hosed?
DeleteAnd yes, this volatility definitely validates coal into an attractive alternative energy! I guess we need more natty storage, too!
TA will be a natty filling station, but muted follow through there.
Hell, I dunno!
BSBR - Looks like an upside down C&H, doesn't it?
ReplyDeleteSo, the geometric target would be at least as low as $4.20, seems like.
Deletepart of me wonders if the 2.5 billion people in China and India are going to consume 10x what we did when we went from 2nd rate to top dog, wouldn't that be incredibly bullish for stuff stocks? i mean i get it, we're overbought in the medium term given the move from 2009 but what happens to our markets if a population of 10x starts consuming and making more stuff?
ReplyDeleteI want to see confirmation, wasn't long ago we saw a new top. It's as if the market was waiting for a new year to begin taking gains.
DeleteWonder why silver's struggling at $20????
i guess the point is shouldn't we all just be ignoring every single move and focusing on this bigger term trend? i know this isn't a new concept, but the markets have never seen a population this large move from poor to middle class which is what will happen over the next 50 years.
DeleteI'm not sure my time horizon goes out quite 50yrs!!! :)
DeleteRe FLWS, I am having bad timing in my purchases these last few. Could have saved almost 5% by being patient to just later in the day.
ReplyDeleteI think FLWS is worth a shot - it's the type of stock I can see people getting excited about in 2014 if talk about moving sales to the web grows.
Concall from NMM is out now too: http://seekingalpha.com/article/1977741-navios-maritime-partners-ceo-discusses-q4-2013-results-earnings-call-transcript?source=yahoo
ReplyDelete9 of their 30 ships are up for contract this year, and it is actually 9 of their 25 dry bulk ships and they are talking about staying short term with these to take advantage of the recovering industry, then will probably try to lock in near the peak to ride out the next down cycle.
The other 5 ships are container ships that are on 10 year contracts that were bought to help make sure the dividend could be funded. They are very conscientious about the dividend.
So, they don't have day rate exposure and that high leverage like BALT, but what they do have is smart, experienced management who looks at things and did a lot of buying through the downturn and stepped out into container ships this year as a way to stabilize their income.
Which stock you buy (or don't) depends on your view of the market and timeframe, etc. But either way the good nugget that came out of this is that a smart manager is not locking in Dry Bulk day rates now as she expects these to recover which helps all players.
Yep, sounds reasonable. I want to try getting back in once the BDI stops crashing. Maybe that was today, hard to know.
DeleteBB - that's strange because their presentation only shows 9% of ships with less than a 3 year contract. I tried listening to the call but it was almost impossible to understand them.
DeleteRegarding BDI - I think a lot of people are waiting for another turn up in the BDI before getting long again. Should provide a nice boost to stocks when it does turn up.
wouldn't be surprised to see V bottoms in all of the shippers as soon as the BDI turns up.
DeleteBrandt - Buy corn.
ReplyDeleteMichael Grimm - How much you wanna bet this Mr. Ballistic guy is not to be trusted for public service?
ReplyDeleteChina's iron ore purchase has arrived into their stockpile, so maybe the recent spike in BDI was in large part associated with iron?
ReplyDeletehttp://www.hellenicshippingnews.com/News.aspx?ElementId=aecd4b79-dc44-4962-ae36-20c5bcfb459f
Surely they must need some coal at some point? Too bad we can't watch global ports by satellite in real time!