(a) Deutsche Bank (DB) has given up 1/3 of its share price since January. This has resulted in the usual analyst downgrades, accompanied by lowered price targets in the twenties (it closed Friday at 34.68). I'm now an interested buyer. What concerns me is whether DB proves to be the front man for the European Financial Crisis. Take a look, for instance, at the price action in London's Barclays Bank, off over -20% YTD.
(b) For those of you still following the ATACX fund managed by Michael Gayed and Charlie Bilello, here is Michael's explanation for the recent drop in share prices. (You'll recall that I exited the fund last Spring after losing patience with their 'once weekly' strategy, which did not mesh well with my 'skate to where the puck is going' trading style at the time.) Given their track record in 2014 (a +7% YTD return through the end of June), I naturally assumed the -6.7% drop over the past two weeks must be an artifact (a yet-to-be-recorded dividend payout, for example). Kudos to Gayed for giving us the play-by-play in this Sunday's Week In Review:
http://pensionpartners.com/blog/?cat=23
No strategy is perfect.
$GOLD -- FWIW here's a current Fib-draw from TheFibDoctor ... (the way he does his draws is that the 100-lvl is at the swing low (1240.2), the pullback long is in the (61.8-50) area (1271.6-1281.4) and the short entry on over-extension is at the 1341.9 lvl. His rules for going up and down a candle-stick progression are neat and disciplined.
ReplyDeletehttps://twitter.com/TheFibDoctor
http://www.thefibdoctor.com/gold-futures/gold-updated-chart-gc_f
http://stocktwits.com/message/24598774#24598774
http://charts.stocktwits.net/production/original_24598774.jpg?1405268507
This comment has been removed by the author.
ReplyDelete2nd, thanks for posting ATACX synopsis.
ReplyDeleteI like to say "the only constant in life is change."
It's interesting that he follows a weekly momentum strategy, as I have not read his research papers it sounds like he buys the previous week's best market's looking for follow through to continue.
I can really feel for his treasury play looking at TBT it nicely for five days (I almost bought first day up) onky to give it all back the next five days. Since I was going to make the trade the point that stood out to me was how fast we have to be in today's trading environment,
Looking at the ten year note you will notice that it stopped at TBT's high right at the 200 sma which has contained the 10 year note since mid April.
The other take is they are looking for a possibility the emerging mkts may break out in an uncorrelated way to US mkts.
Actually they use prior four week return.
DeleteFor utilities:
When a price ratio (or the relative strength) of the Utilities sector to the broad
market is positive over the prior 4-week period, position into Utilities for the
following week. When a price ratio (or the relative strength) of the Utilities
sector to the broad market is negative over the prior 4-week period, position into
the broad market for the following week.
For Treasuries:
When the 10-year Treasury total return is greater than the 30-year Treasury total
return in the prior month, position into stocks for the following month. When the
10-year Treasury total return is less than the 30-year Treasury total return in the
prior month, position into either the 10-year Treasury or 30-year Treasury for the
following month.
$RUT -- Interesting chart ...
ReplyDeletehttp://stockcharts.com/public/1577160/chartbook/321797751;
When the market finally turns this is going to be a great short. Nice chart, so how to play potential wave 5, let the mkt tell or start scaling now?
DeleteHey man, Hope you're doing well.
DeleteThese EW-counts / inverse-mapping approaches are interesting. I understand how Caldaro used an inside-out approach to arrive at the current count
https://caldaro.files.wordpress.com/2014/07/spxweekly1.png
The 2011 Drop was a Key Event, but whether the current FED-induced UP-swing count is correct is suspect.
Caldaro still believes that
"When it does conclude we should have a Primary IV correction similar to Primary II in 2011. Then Primary V should again take the market to all time new highs. A four year Presidential cycle low is due this year, which usually creates the low for the year. The majority of the time they occur in July or October."
BUT these Pattern-Draws on Weekly/Monthly time-frames do presage that something crazy is about to happen. It's just in the human organism....
IMO, the potential short here is as good as it get's, but would play small here until confirmation of down structure.
DeleteI have a lot of respect for wave counts and retracements, but as they say and 2nd says, no system is perfect.
Cheers mate
$SPX -- 1987 Crash Lesson ... Just something I came across while flipping through some SCharts stuff ...
ReplyDeletehttp://stockcharts.com/public/1577160/chartbook/345079637;
http://stockcharts.com/public/1577160/chartbook/285982499;
Structure and Counts are interesting aren't they ... Problem is it's after the Move has gone down ... Interesting Game ....
Something to think about and why they may be changing MMKT rules.
ReplyDeletePer UBS
Messy exit from stimulus?
As we had anticipated, the taper probably will be wound up in a single reduction from $15 billion to
zero. However, as we have also pointed out for a while, the taper is old news. Most key yield and vol
benchmarks in US are near pre-QE2 levels. The real news/question is the potential impact on markets of
the Fed's giant $4.3 trillion balance sheet as the central bank starts to tighten. The minutes show that
policymakers are fairly sanguine; they expect the Reverse Repo Program facility (RRP) to play a "useful
role" in managing that impact. There is only one problem with this plan: lack of market capacity.
The entire US money market fund complex totals about $2.5 trillion. Furthermore, we think the true
capacity of money funds to absorb supply from RRP is a lot less than the full $2.5 trillion. First, the subset
of government-only money funds is $430 billion. This natural source of demand for the Fed's reverse
repos is therefore only 10% of the Fed's balance sheet. Prime funds generally have more appealing
alternatives, since the RRP rate is quite low relative to other shortterm investments.
UNG on 200dsma, should at least bounce
ReplyDeletelator gators
KOG- Don't really follow it but the lack of premium surprises me.
ReplyDeleteDoesn't seem to be a problem! :)
DeleteAA - Moonshot still in progress.
ReplyDeleteGold - Umm, down $32 while you were sleeping (as par for course).
ReplyDeleteSounds about right
Delete"WTO Says US Violates Trade Rules by Imposing Import Tariffs on Steel, Solar Panels from China"
ReplyDeleteTSL / JASO / CSIQ could be in play
Yep, complete with customary fake per-announcement selling stunt too!
Delete(a) Spot gold off by -30/oz (-2.2%). Miners following suit, GDX (majors) -3% and GDXJ (juniors) -5.4%. This is an encouraging start to an overdue pullback, but I like lower-risk entries. Should the selloff continue another day or two into the -7% range, I'll become interested. If not, I'll add the decline to the number of opportunities I haven't minded sitting out the past two weeks.
ReplyDelete(b) DB (Deutsche Bank) up +2.1%!. No position (wtf).
(c) NGas futures dipped as much as -1% overnight, but have since recovered. Taking half the position off here @ 18.55 for a +3.3% gain.
SCCO - See, this one's near 52 wk highs while I sit here on my thumbs waiting for my port to stop shrinking.... Sheesh!
ReplyDeleteExcellent day for the Chinese markets. If Shanghai can finally run over 2,200 we could have a really nice rally in the LEJU/EJ combo as they are being held back due to China real estate fears. It's important to remember that LEJU had a penetration rate of 1% as of 12/31/13. Lots of runway room left.
ReplyDeleteXIN Just noticed this is beat to hell, man.
DeleteSure looks like PCRX is readying itself to move back up for a run at $100.
ReplyDeleteBXE - Well, someone has plenty of shares to try getting rid of and with oil crashing it's not helping.
ReplyDeleteMaybe the 200dma will catch up to it soon?
DeleteNatural resources screwing me again!
DeleteSODA- This level goes back quite a way.
ReplyDeleteLEJU @ 11.48.
ReplyDeleteDrop today reminds me a lot of the one 2 weeks ago. Weak hands passing shares to the stronger ones. Good luck.
DeleteFinancials flying, resources sucking mud
ReplyDeleteAdding back the second 1/2 of UGAZ @ 18.16.
ReplyDeleteCXO - Lookie there another "surprise", oil under attack like coal was/is or what? May as well own BTU, it's already beat to historic lows and oil has a ways to fall to catch up.
ReplyDeleteLEJU off @ 11.71.
ReplyDeleteGDX> from +1% to -1.4%.
ReplyDeleteAdded some @ $8.13, probably an inferior idea but can't just do nothing.
ReplyDeleteIsn't Yellen testifying today, maybe the market's responding to something she didn't clarify.
ReplyDeleteBXE - The $250 M offering was @ $9.50 but that's where the price was that day and price had been lower just previously so the selling can't be due to disappointment concerning the offering I'd think. Thus that SA author is most likely FOS. More like the sector was grossly overextended and was headed down anyway, which raises plenty of questions nobody is prepared or willing to discuss/examine publicly no doubt.
ReplyDeleteI'm still holding. Sometimes these offerings take longer for the market to absorb than you'd like.
DeleteIt has broken the recent lows, so I guess you could stop-loss out, although we often get undercut lows these days before a bounce.
All of the energy stocks have come off some with the price of oil. I'm not concerned about BXE unless we see something dramatic in the energy market like oil back down to $75.
Chart of EJ looks an awful lot like the chart of SID, which is ramping higher.
ReplyDeleteKinda makes me wonder if brokerage trading activity was temporarily better than expected b/c stocks were being sold.
ReplyDeleteOn a broader level, I want to have some commodity exposure for the next couple of years as I do think there are a lot of tailwinds behind energy, base metals, maybe lumber and uranium as the economy improves. Not sure about coal or iron ore or fertilizers or PM's.
ReplyDeleteYeah, PMs don't seem so precious, just overpriced if anything. In terms of silver and industrial demand, every circuit board shrink decreases demand that much more but there might be some possibility demand from solar sector can help keep prices from going to production cost, assuming the solar sector doesn't implement an alternative which for all I know they may already have.
DeleteI think Saut's recap of the 6 current themes is right on http://www.raymondjames.com/inv_strat.htm
ReplyDeleteHaven't looked at the presentation yet, but I will. Have to go cut the lawn first before it rains though!
Here's a good starting point:
Deletehttp://insights.jpmorgan.co.uk/adviser/commentary-and-analysis/wp-content/uploads/280514-continuous-continuation_MI_ENG.pdf
UGAZ is such a mutha.
ReplyDeleteThese swings in LEJU are nothing short of hilarity.
DeleteA close above $15.20 and NOAH is looking pretty good.
ReplyDeleteGDX now bidding 25.80. Opening a small position in RYPMX based on the following contingencies.
ReplyDelete(a) Scaling in at 20% of a full position only.
(b) Should GDX prices hold here, it should be good for a bounce. I may elect to add at higher prices.
(c) Should GDX break down further, I also plan to add.
So 20% feels like a comfortable position size to trade around.
NGas futes started strong, now tanking hard (UGAZ -4% to 17.71). Having unloaded half my position yesterday @ 18.55 for a decent gain, I'm pondering whether to add back (greed), or take a small loss on the remaining half (prudence).
ReplyDeleteHere's a tweet from jesse that has me deciding to at least hold the remaining half:
Deletehttp://charts.stocktwits.net/production/original_24638161.png?1405382595
Another good stat from Detrick on why we should stay bullish - after 5 up months on S&P, next 12 months up 95% of the time
ReplyDeletehttp://stocktwits.com/message/24681168
Most traders I follow are cautious
DeleteI could see that. I am too now with lots of cash. But I think over the next year you want lots of equity exposure and want to be looking for things to buy.
DeleteI don't think you want to be bearish or shorting.
DeleteGod must actually love JPM.
ReplyDeleteUGAZ closed @ 18.25.
ReplyDeleteBTU - High of week.
ReplyDeleteMarket seems to be driving stocks these days more than the other way around. Everything seems to be moving in synch based on macro stuff (Yellen yesterday, China today).
ReplyDeleteNot sure what it means.
Kinda seems like it's looking for some direction...and it's summer.
DeleteJCP @ 8.55.
ReplyDeleteGDXJ @ 41.93.
ReplyDeleteGoldcorp @ 27.12.
BXE - Wow man, someone had definitely decided he wants out immediately.
ReplyDeleteWhat's the story with BXE?
DeleteAlright, BXE @ 8.014.
DeleteThis I think is the pump story that led to the recent top:
Deletehttp://seekingalpha.com/article/2280533-taking-advantage-of-the-disappointment-with-bellatrix?source=yahoo
Bidding BXE @ 8.01.
ReplyDeleteOn the same wavelength this am!
DeleteYep! Not filled yet.
DeleteSeems at this rate we could see mid $7 soon, LOL.
DeleteSVM was bad mouthed this same way in the Canadian press, and it was pummeled intensely. They nailed it though b/c today it's no longer turning a profit.
DeleteSo if there are so many investors making a killing on converting South American farmland into housing then what's that suggest for the price of AG products such as coffee?
ReplyDeleteMy suspicion is BALT trades between the low 5's and $5.7 to $5.8 for a few more months with perhaps one fakeout move lower. I think there's a lot of support down here and it would take a prolonged push lower in spot rates to keep it below $5.
ReplyDeleteIRE is building a base here around $14.
ReplyDeleteI listened to a portion of the Stanley Druckenmiller presentation on CNBC and had to turn it off. I don't know why I always get surprised at the arrogance of some of these guys. He strikes me as a know it all. He's had a tremendously good track record but he did shut down his fund in 2010 because he wasn't happy with his own fund's performance. His presentation centered around Fed policy and how they're making the same mistake they were in 2003/4. Really not a new concept. I'm pretty sure that's the consensus amongst 90% of larger hedge fund managers which means a lot of money doesn't trust the market which is ultimately a good thing.
ReplyDeleteI think the FED pulled the wrong lever or pulled it too hard when they raised rates. Seems like they waited until everyone was loaded with ARMS and pulled the rug from under them at the worst moment instead of waiting for them to convert into fixed rates. Of course there were too many unscrupulous lenders out there loading the system with liar loans so maybe the FED had to do something but man was it a huge punch in the face.
DeleteENSV has been on a major tear past couple of days. Of course I was only able to get a 2% position in it.
ReplyDeleteAnother example where it doesn't hurt to just pay up a little more. I can't remember what I bought for it...i think like $2.6 or so but I was unwilling to pay more when it went to $2.7. And I was unwilling to buy more when it dipped to $2.4.
DeleteGood work man, location, location, location.
DeleteAlright, let's see if we can get $8.42 outta this sucker. Maybe $8.18 is more likely since that would still be less than opening price.
ReplyDelete$8.17, off by a full penny! :(
DeleteBXE filled at 8.01.
ReplyDeleteBXE off @ 8.13.
ReplyDeleteJCP was taken off earlier @ 8.73. Sorry for the late notice.
ReplyDeleteGDXJ off @ 41.79 for a minor LOSS. Truly a wtf move. I recall thinking about selling @ 42.6x, but got GREEDY.
ReplyDeleteRYPMX will be taken off at the close. Why?
ReplyDelete(i) Today's bounces in both majors and minors are on very low volume (little conviction by large buyers).
(ii) GDX currently +2.25%, GDXJ +0.9->indicates 'Risk Off' (the juniors will outperform during 'Risk On' scenarios).
(iii) I was expecting more panic to begin with.
AA up 10 weeks in a row and weekly RSI_EMA at 93. Wow wow wow.
ReplyDeleteThat is crazy.
DeleteThat's BB's trading acumen in action.
Delete900 shares of BXE changed hands at 8.55 after hours. Dudes- if that was one of you, we need to talk. I would have let you take it off my hands this morning at 8.49.
ReplyDeleteSell high, buy low!
DeletePicked up a little VXX @ 27.60. I know, I know.
ReplyDeleteBXE - Where's our morning seller?
ReplyDelete"Brent BarberJuly 16, 2014 at 6:44 AM I don't think you want to be bearish or shorting."
ReplyDeleteAlways appreciate some perspective, BB!
UGAZ @ 17.24.
ReplyDeleteBALT - Just noticed this one had a nice move yesterday.
ReplyDeleteIt's been a difficult market to trade, and it's even more difficult now.
ReplyDeleteCheapest natty on Earth, right?
DeleteBuy signal? "The worst possible time to own gasoline"
ReplyDeleteWish I'd elected Romney. Not b/c he owns dancing Dressage horses but b/c he promised low gasoline prices.
ReplyDeleteI could probably do better playing the slots right now.
ReplyDeletePlaying slots is like raking leaves...mindless yet oddly enjoyable.
DeleteSet the leaves on fire if you want some excitement, can't do that in a casino!
DeleteUGAZ'd again! Off @ 16.20.
ReplyDeleteHoly crap, no wonder BXE came off too. Has ocean methane production begun already?
DeleteThere's our morning seller, his determination impresses me.
ReplyDeleteAt least TBT has come back to me. Other than that all else sucks.
ReplyDeleteBXE - Judging by this chart it seems like we could see slightly more than another $1 of haircut. The big question is, can it ever recover or will it slowly sink into the sunset and eventually disappear?
ReplyDeleteWhat's working on my screen: big caps, solar, fracking related stuff, extremely beaten down stuff
ReplyDeleteAFL
GM
SPWR
SUNE
ENPH
MBI
PIR
SLCA
ENSV
Re AA, it is tempting to sell and try and reload lower, but I think there is a reasonable chance you wouldn't get back in as business is doing well and I think people are starting to see you want these economically sensitive type investments.
ReplyDeleteJust got a report from TD on the top 50 or so Energy companies in Canada and BXE is still one of the very cheapest and probably the cheapest one that isn't highly leveraged.
ReplyDeleteCP, you are probably right that there is a fund which is selling and it is taking a while. Some people were pissed that they did the unnecessary capital raise recently.
They did the same thing with SVM too, I think sometimes those guys actually get it right?
DeleteBOIL - If I was to load the boat I might make up for the poor BXE entry IF today's loss reverses.
ReplyDeleteVXX. F----in' A.
ReplyDeleteI was gonna say I liked the entry but didn't want to jinx you.
DeleteUCO - Recovering now, maybe there's a silver lining for oil producers?
ReplyDeleteBALT - Looking like this one might hold here.
ReplyDeleteGOOG - Sure seems like to me these guys search engine has become selective in odd ways.
ReplyDeleteWhat's the status on electric cars, seems to me they should become mandated based on similar rules as water restrictions. Odd addresses must commute using their electric vehicle M/W/F this month.
ReplyDeleteVehicle monitoring - That car monitoring device took it's maiden voyage last weekend, beeped at me just a few times on a 66mi round trip to town. Not sure if it's teaching me or I'm teaching it, how to drive.
ReplyDeleteDG - Not sure if that's a bull flag or a beeline to next support in very low $50's This one I'm pretty sure is gonna be around for a good while, don't see how WMT/TGT can crush them although they may try.
ReplyDeleteBOIL - Alright BOIL, where's the next leg down? "Bring it!"
ReplyDeleteEPAM - Any thoughts, iH&S maybe?
ReplyDeleteYELP - Only $1 from where I sold too early.
ReplyDeleteCP, the analyst reports are great for getting info - they have experts that understand and spend far more time on things than we do. What you can't trust is the buy/sell ratings and targets as these are more trend following (buy after up, sell after down).
ReplyDeleteCP - BALT is at a very important area technically. If it can't hold above $5 then the assumption is the recent crash in spot rates will either stick around for a while or will lead to lower rates. I had a feeling when I sold back in the $7 area that the $5.10 area would be tested again. I think rates ultimately rise a lot over the next 2-3 years as China demand continues and India ramps up infrastructure demands significantly, coupled with a market that is keeping supply much lower relative to demand. However, the market needs to shake out people before this happens. So I suspect we will see one or two failed rallies before a true rally begins. If BALT does go back to the higher 6's area I will probably sell half and then try to reload in the lower 5's. That's a bigger picture strategy that I have in mind.
ReplyDeleteThis isn't a unique pattern, by the way. Lots of stocks / sectors that enter into a new bull market have a major shakeout period after the initial big rise. One stock I refer to from time to time is KKD. Check out how that traded after a massive rise into the 2011 highs. It consolidated for 12 to 15 months.
DeleteAll of that makes excellent sense and quite plausible, I guess my concern is China may continue flooding the market with ships simply to keep workers employed.
DeleteCYD - I doubt this company can make those giant engines and my guess is if the Chinese gov decides they want to move in that direction such contracts wont go to US listed Chinese companies anyway.
DeleteNOR - This one's been flying too, and they don't make parts as far is I'm aware. So maybe this move is in sympathy with AA or the aluminum market returned with a vengeance?
ReplyDeleteSRS - How about this puppy guys, sign me up for eternal uber low rates but at what point does the pool of buyers begin drying up, never?
BX - iH&S alert?
ReplyDeleteNWLI - It's rough out there, at least for me it is. This thing sure swings big for so few shares being traded.
ReplyDeleteINT - Is price/sales really 0.08x ?
ReplyDeleteIDX - Looks like bull flag, huh? Remember when Jessee suggested buying it?
ReplyDeleteI finally closed VXX @ 27.96. ----. Could have/should have taken it @ 28.4x.
ReplyDeleteBOIL - Can anyone think of a powerful chant that might make this one collapse to $15 for a day or two?
ReplyDeleteWhoa. This is the first time I've looked closely at Nat Gas. Nasty! Gotta be because of the cool summer, no? I was in Boston last weekend and it was actually chilly at the beach. Unusual for mid July.
DeleteYeah, I'm sure summer demand isn't quite as robust as it could be due to cool weather perhaps, storage volumes are high, I think.
DeleteBut also, there are more wells producing today than there were November, I'm sure? West Tx should be producing about now, I'd think? (might take a while to peak)
These companies that store the gas should do well I would think with their pipes popping full and the ability to charge for delivery of a commodity in possession and no doubt will be consumed?
I feel so isolated when it comes to energy production, can't just put my ear to the tracks on that one either.
Lot of talk on BNN on Nat Gas as Canada's market is 40% energy.
DeleteIf you want to understand a bit what the bullish guys are thinking, take a look at - its about El Nino's and Volcanoes and how these affect the weather patterns. Others are not so bullish, but either way, it is very complex and nobody really knows:
http://www.bnn.ca/Video/player.aspx?vid=400841
I can't watch the video unfortunately but trying to trade around geothermal event forecasting most likely qualifies as being beyond insane.
DeleteI think there just looking for an edge. If you can figure out the probability that this winter will be cooler than normal with a 80% probability, that's a money-making idea. These analysts are smart. We'll never beat them on this type of stuff, we just have to make good stock and portfolio decisions.
DeleteIf I was to guess, I'd say this winter will not be as cold as last, for us up here.
DeleteUNG - Take a look at where this ETF (that decays) was last Novemburr and where many of the oil (ie: GAS) producers were, doesn't it look like the oil producers simply followed the natty rally?
ReplyDeleteThe talk last year was a lot of the commodity decay was going away as the forward prices moved from being higher than current contract to lower and you'd actually make some money on the roll - you can really see it in oil prices and nat gas as well to a smaller degree.
DeleteThus we can probably ignore the decay metric for the comparison.
DeleteNOR - BofAML 5 Yr. Est. Growth 10%
ReplyDeleteDespite BACML practically owns all this company's debt, Can you believe this growth rate doesn't justify more than a $3 price objective?
It's my perception some prices still swing up and down just for the sake of trading, recent action of the past couple weeks makes it hard to imagine strong hands have assumed control. Maybe in the large caps strong hands took over?
ReplyDeleteThis was an expensive day.
ReplyDeleteLong AMD only for a trade at $3.96. Will stop out if it drops below recent lows.
ReplyDeleteAdded $3.92
DeleteWill sell if it drops below $3.85. I figure there's a chance it could reverse higher but we shall see.
DeleteOne last add at $3.88. Crossing fingers. Smallish position though.
DeleteThey say hope isn't an investment strategy but crossing your fingers is!
DeleteLooks like I got stopped out at $3.82. Gave it the old college try.
DeleteAnyone care to go long on the back of what happened today?
ReplyDeleteDamn, that was 2nd I saw backing a Camry out of his garage with a rocket strapped on the roof.
ReplyDeleteDecent spike in CPCE (Equity Put/Call Ratio), but still not really high at 0.67. When it hits 1 then that signals panic in the market. The vix had a 32% spike which signifies more panic. I'd say we probably do the opposite of what people expect, which I'd presume is a selloff into the weekend followed by a spike lower on Monday. If we go lower, I bet we gap down tomorrow then rally all day long and gap up on Monday...then go lower.
ReplyDeleteDoesn't really matter that much, though, does it? The key is to stay in stuff you consider cheap if you want to be long as those most likely will be less impacted when the market drops and/or rebound quickly when the selloff ends. I'm long LEJU, SNE, BALT and then a small position in ENSV & really small in ESTE which I don't even really follow. I'd consider all of these to be cheap with the potential to rally significantly over the longer term.
DeleteI almost bought some SPWR today but didn't and I already regret it. I suppose I could buy some after hours. I think the SUNE yieldco IPO tomorrow will help the solar stocks significantly. Word is it was extremely oversubscribed.