I like the fact that both Emerging Markets (EEM) and
Miners (GDX) spiked post-FOMC on high volume.
Nice breakouts in both. I opted
to sit out the Yellen madness. Should I
now panic? One of my hard and fast rules
is never to chase. I'll wait for
pullbacks to unfold in each sector- should they materialize, I'll open
positions then. Trading the first
pullback following a breakout is actually a higher probability bet, as the
decline tend to 'absorb supply' in the form of weak hands.
In this case, SNE is the point bet. EEM and GDX (should they set up) represent
the '6 and 8.'
JCP @ 9.10.
ReplyDeleteAdding to SNE @ 16.80.
ReplyDeleteIs there news?
DeleteThe FED didn't change their plan, said economy is strengthening. Maybe that's the news?
DeleteMaybe TOF is scheduled to talk about it on CNBC and we don't know about it?
DeleteYou're mean! :) TOF hasn't mentioned the FED at all. :(
DeleteNEWL- Bye bye.
ReplyDeleteCORN - Looks sweet, don't it?
ReplyDeleteTVIX - My broker won't allow me to buy this one, bastards!
ReplyDeleteSCO - How low can it go?
ReplyDeleteToo much froth in GDX and EEM.
ReplyDeleteAll PMs moves are false unless they occur between 0:300~04:00 est.
DeleteVXX. Totally believable.
ReplyDeleteBAH - Is that an H&S, no way it could be!?!?!
ReplyDeleteBP - I saw a film clip of one of their Iraqi oil fields on fire.
ReplyDeleteSNE needs to hold above $16.7 in the short term for this to be a valid breakout. Lots of beaten down stuff rallying. That's probably where all of our money should be. BBRY, JCP, WLT, SNE, APP, etc...
ReplyDeleteSmall position in RYWVX @ the 1030 window. Just a hunch.
ReplyDeleteJust for a day trade or are you holding? EEM looks pretty good on a longer term chart.
DeleteIf it comes up six within the next 24 hours, I'll press the bet.
DeleteAlso like the GOOGL trade into the i/o conference next week.
ReplyDeleteI'm slowly transitioning to a ST bull, which should raise a red flag going forward. On the other hand, I'm still a non-believer, which may augur well for a brief foray on the long side.
ReplyDeleteTo be perfectly clear, I placed $6 on the six.
DeleteI've come to the conclusion we have to buy JUST AFTER the wave crashes on shore.
DeleteSure seems like some more short term gains...kind of think the russell gets back to new all time highs again. the rotation is in full effect with the beaten down stocks rallying now. longer term I think SNE can get back to the 2013 highs and then some. i think as project morpheus gets closer to launch date they should rally.
Deleteie: Yellen yodeled the all-clear.
ReplyDeleteWhat am I looking for?
ReplyDelete(a) JCP back near 10
(b) SNE continues to climb
(c) EEM breaks out to new 52-wk highs
Sounds reasonable. Can't get what you don't ask for.
DeleteI just congratulated my wife on holding Goldcorp through this morning's gap up despite my recommendation that she sell.
ReplyDeleteShe always knows best. I'm reminded of this t-shirt
Deletehttp://galleryplus.ebayimg.com/ws/web/141035403923_1_0_1/1000x1000.jpg
She keeps your nut sack in her purse?
DeleteHIMX rips without us in. Naturally
ReplyDeletePIR: The wicker king goes down
ReplyDeleteBACML shook an ugly stick at it today.
DeleteNWLI - And another day bites the dust! :(
ReplyDeleteStill up 10% YTD, even with the recent pullback. Wouldn't be concerned. Not a fast mover, but has a lot of value and earnings behind it that will come through.
ReplyDeleteOh No!!!... COCO!
ReplyDeleteHoly crap, glad I wasn't in that one. Just saw someone was harping the merits of the sector a few days ago, too.
DeleteI picked up a little more TLYS at $8.01 and $8.06 today. Keeping position small
ReplyDeleteI'm thinking this can get to $10 to $11 to be in line with competitors.
DeleteI believe this is the guy that used to write for Minyanville:
ReplyDeletehttp://seekingalpha.com/article/2205683-bubble-watch-imagine-what-would-happen-if-optimism-reigned
I recall him being quite bearish in 2010 or so. Interesting turn of events...
TBT - Trades like YELP
ReplyDeleteCORN - Sweet!
ReplyDeleteNWLI - Volume kicking in, must be done falling.
ReplyDeleteCould have been someone just wanting to sell. Most lifeco's are doing well now
DeleteI was on the verge of buying some at $244 for a trade.
DeleteSold out of PCRX at $86.2 today. I had no real reason of doing this other than the valuation and I am hoping to get a better entry point. I think the stock is a wonder drug and the company should grow into its valuation.
ReplyDeleteNice trade. I see they've removed the 89+ print previously reported as the day's high. I remember seeing that and kicking myself for not having opened a position. I'm still kicking myself, but not as hard!
DeleteSitting in about 40% cash now. I have a pretty big position in SNE (hoping that today was more than just a one day rally) and a much smaller position in TLYS. I still have that tiny position in ESTE which just continues to rock but unfortunately I never added to it along the way. Damn near a double now. Oh well.
ReplyDeleteI'm just waiting on entries at this point. I like ZOES a lot around the low-mid 20's for a longer term hold. Hoping to get back into GM in the low-mid 35's. Really at this point I'm just trying to be more selective. My portfolio went from -8% to maybe +20% in the span of 6 weeks. That's no joke.
I still think the odds favor more upside though. Especially in Japanese stocks which is why I've liked Sony. I like that the market is rotating into the beaten down larger market cap stuff because SNE is exactly that.
DeleteThere's hardly a soul talking about Sony. I like that. Just hope that it can continue on today's move.
DeleteI picked up a few shares of TZA afterhours at $14.39 primarily as a hedge. I have just been getting a feeling that there's potentially some downside coming but it will most likely be after a bit more more upside...kind of thinking RUT gets to 1,200 again but maybe the old head and shoulders finally works? Not a strong feeling or setup but a lot of stuff I've been looking at in terms of indicators have been quite bullish. So I'd like to move more to cash and maybe do a little hedging. This guy had a nice rundown of them yesterday:
ReplyDeletehttps://twitter.com/JackDamn
*Investor Intelligence Bulls Minus Bears Total: https://twitter.com/JackDamn/status/479467299317903360/photo/1
*CBOE Put/Call Ratio: http://stockcharts.com/h-sc/ui?s=$CPCE&p=D&b=1&g=0&id=p89201181476 (this one isn't perfect...generally suggests a pullback is coming fairly soon but usually a little more upside after a reading of 0.38 like yesterday)
*CNN "Fear & Greed" Index at 94: https://twitter.com/JackDamn/status/479372780467523584/photo/1
Another thing I kept thinking is typically we see a retest of the prior highs in primary bull markets for stocks and stock markets. The prior highs were 1,575. I was thinking well what if we get a 20% correction to signify a bear market...at what price would that occur that would bring the market down to prior highs? 1575 / 0.80 = 1,969. What if it is a 25% pullback? 1575 / 0.75 = 2,100. I know this is nonsense but the thought has kept coming back to me. And what better time than now for this to start occurring, when traders / fund managers are very bullish and ignoring what seems to be some pretty significant turmoil in the middle east and russia and with rising oil prices? Part of me wonders if I'm scraping around for the last few bits of pennies of this bull market. I've had a bit of a tougher time finding reasonably valued stuff. Even things that sold off hard are still pretty expensive in my view. Things like DXPE, DSW, EXPR, BID, amongst others. There's some value in the insurers and auto companies from what I've been looking at. And I'd love to re-enter some solar stocks on pullbacks.
PIR, by the way, seems like its getting close to reasonably valued. It's usually good to let the dust settle but they only guided down about $0.10 I think. So it's trading at around 14 times earnings which isn't that expensive. Getting there...
DeleteThere's absolutely no question a correction is in the cards, but no one knows when.
DeleteInteresting that he wrote about HERO. I've been looking at this company for the past couple of days:
ReplyDeletehttp://reminiscencesofastockblogger.com/2014/06/15/a-new-bet-on-hercules-offshore/
http://money.cnn.com/data/fear-and-greed/?iid=H_INV_QL
ReplyDeleteMaybe it'll hit 99 before the correction arrives.
DeleteA Message From Big
ReplyDeleteOriginally published on Friday, June 13, at 8:08 a.m. EDT.
In the course of writing my diary over the last 15 years, I have chronicled the lives, contributions and views of numerous iconic investment figures: Warren Buffett, Jim Cramer, David Einhorn, Leon Cooperman, Nouriel Roubini, Byron Wien, Barton Biggs, Alan Abelson, Sir Larry Kudlow, Stanley Druckenmiller, Jeff Saut, Peter Boockvar, Mark Grant, Jerry "The Chief" Jordan and many others.
In my upcoming book, Doug Kass on the Markets: A Life on the Street, I have even devoted a chapter to some of these investment pros.
I have also highlighted some less-known (or even unknown) characters that live on the periphery of the Wall Street community: The Bearded Prophet of the Apocalypse and perhaps the most colorful figure, Boca Biff. These are also actual people but for various reasons I shroud their identities in anonymity and have given them monikers instead of using their real names.
This week a new personality was unveiled, Big, who has recently adopted a strong and bearish market view.
Similar to the Bearded Prophet of the Apocalypse, Big is known in investment and corporate circles, so I can't divulge much about him for fear of him being identified (for which he has not granted permission).
Indeed, two members of both TheStreet and CNBC communities will immediately be able to identify Big, and I am asking them this morning to respect Big's privacy.
Unlike Boca Biff, Big is not reckless.
Big is a longtime pal of mine and a neighbor in southern Florida.
He has founded and has successfully sold out of two public technology companies and has probably made nearly $400 million in the process.
He is a consummate sportsman and a very large gambler. (He recently won a well-publicized $7 million in a sports-related bet).
Big is rough around the edges, a street guy. He is quite smart, however, and despite not having an advanced degree, Big has invented numerous products, one of which is well-known today and is often seen in advertisements in the business media.
Most important, he is a good friend to me and has a kind heart.
He is among the most charitable people I know.
As I have written, Big has taken a very large short position in the U.S. stock market. He is short the S&P 500, Nasdaq and Russell 2000 indices in size.
Big is a man of few words as illustrated in an email I received last night from him, which I wanted to share with everyone:
It's been five years since recession and the U.S. and global economies have not made many strides.
Homebuilding is weak, unemployment remains high, and there is no future for many.
The only advances we have made are because of zero cost money.
Our banks and investors are making the same mistakes they made in the last cycle. Leverage multiples are back to 2007 levels. There are loads of very bad business loans out to companies that will eventually fail.
The earnings improvement is all financial engineering where companies like IBM (IBM) get free (0%) money and buy tons of their stock back. Then they earn more in EPS because interest rates are so low.
If AT&T (T), Verizon (VZ) and many others were borrowing at rates from a few years ago, they wouldn't even be profitable.
In other words, we have hardly gotten out of recession, and the stock market has more than doubled.
Economic growth will continue to be anemic, and signs of deflation will appear.
This week is the beginning of the market going down.
It will be more than a correction, because it will not go higher in 2014-2015 than where it stood a few days ago.
Pension and other funds want a break and haven't had one for five years.
They will get one now.
Most traders and investors should take a summer-long vacation and, at the very least, close out many of their long positions.
At the time of publication, Kass was short SPY, QQQ and IBM.
Since June 13, we have the following numbers: SPX +1.2%, NDQ +1.1% , IWM +1.97%. I actually think 'Big' will be correct. But I also could have predicted that the market would absolutely 'dis' any such public pronouncement re an imminent decline. Let's see how much punishment it dishes out before finally pulling back.
DeleteIn that case PMs may have done an impressive job of sucking in a few late comers.
DeleteI thought the TSLA was supposed to be exceptionally fast, seems comparable to a Bentley.
ReplyDeletehttp://www.zeroto60times.com/Tesla-Electric-Cars-0-60-mph-Times.html
Porsche is considerably faster, so is the Ferrarri.
TSLA - One heck of a short float.
DeleteI hate being late to the party. Having said that, it's hard not to recognize the move in gold for what it is: a sea change in the way miners should be valued. The move is probably fairly extended in the very short term, but in the longer term I think these miners will have to be repriced upward. The inverted head & shoulders formation on the gold chart was defended for now (http://stockcharts.com/h-sc/ui?s=GLD&p=W&b=5&g=0&id=p33233207849) so that probably calls into question the common assumption that gold is heading lower and therefore gold miners should be priced appropriately. I'm looking into this space now. I've only gotten through a handful but this one looks good so far:
ReplyDeleteGORO
I bought a little MDW yesterday, a lot of vol yesterday and they definitely have the gold.
DeletePlus, if you look at the long term chart of HUI (Gold Bugs INdex), it is right back at 2004 and 2009 support. Good place to look for a bounce for sure, but not sure if it holds.
DeleteTOF looking into the miners. I can die in peace now knowing I've seen it all.
ReplyDeleteEddie Money played at the fair here. He looked like a homeless drunk transvestite. I'll try and find a picture.
ReplyDeleteSaw Huey Lewis a few years ago. Don't think he knew where he was and coldn't remember when he was supposed to play his harmonica or not - luckily it didn't matter as pretty much the whole thing was just a CD, so only the lip-synching was off.
DeleteSad the way some of these guys go down.
Those guys are still alive and kicking? I think the last concert I went to was the B-52's, in a field across the street from my place in Austin.
DeleteI just Googled an image of Money. In the late Seventies I thought he was a good-lookin' dude. Now he's like the male version of Shelly Winters.
DeleteTZA - In @ $14.28, a pretty decent size position.
ReplyDeleteThe whiskey on his breath could make a small boy dizzy.
ReplyDelete2nd,
ReplyDeleteKass has been predicting this for probably 3 years. One of these times, he'll get it right and tell everyone how he called it. Just like he called the 2009 bottom 8 or 9 times before he got it right.
He writes a good story and they are fun to read and believable, but I've learned not to put too much faith in him.
TOF,
ReplyDeletere HERO, I've been thinking about deep-water driller ESV (better value), but I think that whole space may be setting up well. Similar to the shippers a couple years ago when everyone was talking about the current oversupply, but not seeing that the market was getting better over time and these businesses were getting better.
HERO- Been a while since I looked at this one. If I rememeber right they won a ton of old jack-up-rigs right? Highly leveraged?
DeleteThat's one of the reasons the reminiscneces guy likes them is their leverage - if the market improves, leverage is good!
DeleteVery thin margins in the shallow water stuff. Kinda like building houses! Any idiot can do it.
DeleteMark,
Deletetake a read and let us know what you think:
http://reminiscencesofastockblogger.com/2014/06/15/a-new-bet-on-hercules-offshore/
TOF,
ReplyDeleteI'm sure you saw the SONY AGM news. Definitely low expectations there. I agree with your thesis that it could really move on any sort of good news.
Personally, I don't like investing in consumer electronics companies or media companies for that matter, so I am staying away. Lots of money to be made in those businesses, but just not an area of strength for me.
STEM - ?
ReplyDeleteNVDA - BACML downgrade.
Looking at VXX.
ReplyDeleteAll day. RSI (14) got to about 14.20 the other day.
DeletePlaying an arb opportunity in a Canadian stock RYL.TO. Been buying at $1.39 to $1.40. Closes the end of the month and you get $1.00 back plus .1 of a share in HLC.TO that's trading around $4.25 (and a big block just sold at $4.50).
ReplyDeleteSo, for $14,000, get $10,000 back, plus can sell the shares for $4,250. So make a quick 6% in a couple weeks - that's over 400% annualized and low risk as the deal is certain to go through.
One of the advantages of being an individual investor. I can pick up 5,000 or 10,000 shares every few days and it incrementally helps my returns, but for a fund, not even worth looking at.
We either start to correct, or see a blow-off top.
ReplyDeleteDamn. The wife is still right about Goldcorp.
ReplyDeleteIf I was going to pick a long term buy and hold type gold stock, that would be the one.
DeleteCanadian Energy Stocks get an upgrade - I find them hard to buy when they've had such a good move, but maybe we are in a strong bull for energy and it will be hard to get in:
ReplyDeleteResurgent energy sector could push TSX to new highs
Thursday, June 19, 2014
DAVID BERMAN
Canada’s benchmark index hit a record high on Wednesday, even as the energy sector remains well off its peak. Is the laggard due for a little catching up?
Credit Suisse strategists believe so. They upgraded global energy stocks to “equal weight” from “underweight” – an asset allocation term meaning that the stocks deserve a fair representation in portfolios.
It’s the first upgrade in six years, and it carries a lot of meaning for the Canadian market, given that energy is the second-largest sector within the S&P/TSX composite index. It has a weighting of more than 26 per cent, versus less than 11 per cent for the more diversified S&P 500. In other words, where energy stocks go, the TSX is sure to follow.
The Credit Suisse call is largely global, though, and rests upon five key bullish signs.
1. The strategists point to relatively cheap valuations based on price-to-book ratios and dividend yields.
2. Upward earnings revisions are the strongest they’ve been in 18 months, and the trend should continue given the gap between the crude oil spot price and consensus expectations.
3. Most integrated oil companies have new chief executives at the helm, and they’ve brought new spending discipline with them.
4. As for oil prices, higher seems the most likely route in the near term. July and August are seasonally strong months; oil should rise with global economic momentum; and oil offers a good hedge against a geopolitical calamity in Iraq.
5. Investors are cautious. Net “buy” recommendations on energy stocks are at a 32-month low and hedge funds are net short of European energy stocks.
So why not ditch the “equal weighting” and go for an “overweight” recommendation? The Credit Suisse strategists believe free cash flow is still poor, they have a bearish view of oil over the long-term (the price is abnormally high relative to its historic norm, they said) and the energy sector tends to work as a defensive play.
“It has outperformed 78 per cent of the time the market has fallen since 1999 and 88 per cent of the time that credit spreads have risen – neither is our central scenario,” they said in a note.
Still, the move from “underweight” offers an interesting move toward energy stocks – if not a full embrace – and that’s a big deal in Canada. If the upgrade is right, it could mean plenty more record highs for the S&P/TSX composite index, where energy stocks are still about 17 per cent shy of their peak.
As for individual picks, Credit Suisse analysts recommend four Canadian stocks:
Canadian Natural Resources Ltd: Free cash flow is growing and the company is transitioning toward assets with a longer lifespan.
Gran Tierra Inc.: The company has a strong balance sheet and stable cash-flow generating assets in Colombia.
Suncor Energy Inc.: “This stock remains our preferred integrated pick given the sheer cash flow generating power of its low-decline, long life asset base,” the analysts said in a note.
TransCanada Corp.: The valuation is reasonable, the company has a strong exposure to the North American infrastructure sector given its network of oil and gas pipelines, and it is moving toward more predictable growth.
Buying opp in HERO?
ReplyDeleteHERO
Hercules Offshore tumbles after fleet status update
Among the negative items is the Hercules 260 being stacked in Gabon and the termination of the drilling contract for the Hercules 267 with Angola.Fleet status reportSEC Form 8-KIberia Capital throws in the towel on its Outperform rating, and Cowan cuts its price target by $0.50 to $6.50.
I've been reading the minors have been losing their leases in favor of the big boys.
DeleteBB- I'll take a look when I get back.
ReplyDeleteNSPH moving on no news.
Who wants to buy the nosebleed tickets just to watch a burned out homeless transvestite? Take a walk on the wild side....
ReplyDeleteSo baby hold onto me, whatever will be will be, the future is ours to see when you hold onto me......
DeleteI laughed at Mark's transvestite comment and had to google him to see a picture. He looks strung out at best.
DeleteI pulled the ripcord on TZA at $14.42 and loaded up on SNE. I figure the Nikkei is going to make new highs with or without the US markets. And even though SNE has a lot of exposure to consumer electronics, it also a decent amount of exposure to media / content and financial services and the sum of the parts is in my opinion worth a shit load more than $17 Billion. There's some risk to the pension obligations in my opinion and that could ultimately mark down the book value. But they do have $8 Billion in net cash to offset that.
ReplyDeleteSo if you add the value of Sony Pictures (I'd estimate it at $5 Billion (compared to LGF (almost $4 Billion mkt cap) that's probably low balling it as SONY Pictures has a leading market share and has had one for the past decade) to the cash you're looking at a $50 Billion+ electronics company valued at $4 Billion (p/s of 0.08). Shit even HPQ, another consumer electronics company that I'd argue has inferior products, trades at a p/s of 0.50. A part of the electronics division is Sony Playstation. Let's look at a comparable of that division: Nintendo (NTDOY). That trades at a market cap of $14 Billion and Sony, again, has a leading market share in gaming. Even if you discount the value of that division by 50% vs Nintendo, that leaves you with a value of $7 Billion. So the market is saying the remainder of the electronics division is worth -$3 Billion.
Higher rates should ease pension concerns, no?
DeleteI'm still holding onto my two tickets to paradise for now.
And the colored girls say doo-da, doo, da doo, da doo....
DeleteA buddy of mine is the nephew of the now deceased Lou Reed. He said he was one of the bigger a-holes you'd ever meet.
DeleteI wouldn't have guessed Lou Reed was an azz, learned something today.
DeleteKB - There's a long for ya.
ReplyDeleteI kept 100 shares of PCRX in my in laws account and just sold that. Looks like they're up 10% this year at last check. I've kept their risk levels lower than mine so they're underperforming me but they never dipped into the red this year. Right now I have them in TLYS (underwater) and SNE with about 70% in cash. I like GM on a retest of recent lows but not sure it gets there - I might just end up buying that one. I see that getting to $55 eventually, assuming earnings come in around the $4.70 estimate for 2015 and they trade at 12X.
ReplyDeleteI don't know if you guys have any strong opinions on any of the miners but here's a quick list of what I thought looked good - I was mainly screening for companies that have shown good earnings power in the past, that had moved up at least 5-fold in prior rallies, and/or that had significant discounts to book value.
GORO
RIC
ANV
AUQ
HMY
IAG
EXK
AG
That Contra the Heard Guy in Canada, who has a very good track record, bought Harmony in December at $2.42, pretty much bottom ticked it.
ReplyDeletehttp://www.theglobeandmail.com/globe-investor/investment-ideas/strategy-lab/value-investing/benj-gallander-plays-contrarian-to-investor-stereotypes/article17306891/
Interesting. Any way we can see his other holdings?
DeleteWow PIR really taking it on the chin. Getting kind of interesting if it can establish a floor.
ReplyDeleteWhats the EPS here?
DeleteI think they guided $1.10-$1.15 this year.
DeleteGOING Concern, BACML said yesterday.
DeleteTook a big short position in IWM at $117.9.
ReplyDeleteNo real reason other than I see many momo stocks getting hit the past few days so figure its worth a stab. Willing to close it out for a small loss if its not working.
DeleteIBB working makes it harder.
DeleteGood point.
DeleteWhich index are the solars in, I don't want to be short alternative energy or any kind of energy, I don't have the stamina for that.
DeleteClosed it at $117.97. Market just drifting higher.
DeleteNFLX- DB top?
ReplyDeleteFJTSY (Fujitsu) up 100% since October. Impressive.
ReplyDeleteCrap, I didn't know we could trade ForgetsU!
DeleteFRO - Holy geez, I was looking at this one yesterday thinking about how it's sinking.
ReplyDeleteTSL looks interesting here. Have you guys looked into this one at all? I just bought some at $12.88. From what I read they appear to have less exposure to the Chinese tariff issue than the other Chinese mfgs. They're looking to do a yieldco as well.
ReplyDeleteWTF I Just saw that CS covered the Chinese solar names today, ranking TSL as a neutral with, get this, a $19 price target, some 45% north of its current price. Typically a neutral suggests that it won't outperform or underperform the overall market. Where do these guys come from?
DeleteI took this off at $13.08. I was only looking to day trade it or trade it for a few days. 1.5% in the span of 45 minutes works just fine for me.
DeleteOut of all positions (SNE @ 16.9x, JCP @ 8.9x, RYWVX @ -1%) for a net loss of -0.3% for the week. The loss understates the emotional toll- ie, I traded badly overall. By that I don't mean I should have reversed the direction of my trades, but that I should have stayed out. There really weren't any good setups for my trading style, and I 'forced' too many positions.
ReplyDeleteI think we go down next week. For what it's worth.
The game is all mental. Not unlike life itself.
DeleteIf I'm not at the top of my game, the odds of winning are significantly lower.
DeleteI took the chicken shit way out and just transfered some money into my retirement account.
DeleteI would agree. Sometimes we're well rewarded for playing a game of chicken with opposing traders. Other times it's smarter to play it safe. Nothing wrong with being chickenshit along the upper boundaries of Bollinger Bands.
DeleteWhat's the old saying? When you see everyone else jump off a cliff, walk home and read a good book.
Deletenew post
ReplyDelete