Comment by phil

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phil
March 26th, 2014 at 12:03 pm

MoMos/Jabob – Why have they dropped?  Why did they go up is really the question.  The MoMos were being pumped up to prop up the market to new highs and, now that the overall market is failing the new highs, the MoMos are just way too stretched.  I agree that new IPOs suck the money away from other risky stocks (same investors) – they are just getting fresh horses as well.  Anyway, so far it's just a minor pullback – hardly a trend so far.  From Dave Fry this morning:



Monday market results were misleading as under the surface heavy damage was done to previously important sectors like biotech and technology. Tuesday markets repeated Monday's mixed trading results as Big Cap sectors, DIA & SPY for example, out-dueled Small Caps (IWM), which declined. While it wasn't as poor of a showing as Monday's market performance, equity markets perhaps aren't as highly correlated as they used to be and could merely be in rotation. 

Economic data continues to be mixed as the FHFA House Price Index was weaker at 0.5% vs. the previous 0.7%. The Case-Shiller Home Price Index reported a flat 0.8% vs prior 0.8%, and New Home Sales slumped to 446K vs. prior 455K. Finally, Conference Board Consumer Confidence soared higher to 82.3 vs. prior 78.3. The latter was curious since the Conference Board speculated forward guidance remained weak as business remains unwilling to invest.

Leading market sectors lower included: Small Caps (IWM), Biotech (XBI), Consumer Discretionary (XLY), Retail (XRT), REITs (IYR), Homebuilders (ITB), Internet (FDN), Solar(TAN), Telecom (IYZ) and Bonds (TLT)









Oil hit $99.50 – very nice.  Keep in mind that's where we flipped long yesterday – it's good support but hopefully today it fails. 

GOLD/Piper – I really only like ABX, HMY and NAK as a speculative.  Unless you mean GLD, that's OK but I'd rather play the miners.  NAK is back to $1 but ABX took a nice dip and you can sell the 2016 $17 puts for $2.75 and use that money to buy the $15/22 bull call spread at $2.85 so net .10 on the $7 spread that's $3.21 in the money (up 311%) to start!   Why mess around with anything else when your worst case here is owning ABX at net $17.10 with a break-even at $16.05 (12% off)?   In fact, we need 10 of those in our Income Portfolio!  

PLUG/StJ – Very true.  

Kickstarter/Shadow – You only have to tell people WHAT it does, you don't have to tell them how to make it to get funded.  If it's a good idea and people want it, then you can get it funded through kickstarter, as long as you can get some made for about $100K (a reasonable expectation for raising funds).  If not, you'll have to find sympathetic VCs in that space.

TSLA/Jabob – Now 12,000 constitutes "plenty of buzz"?  That's two weeks of Ford Escape sales AND they have two other top 20 sellers to go with it!  

Rank	Best-Selling SUV	June  2013	% Change	Year  To  Date	YTD %  Change
#1	Ford Escape	28,694	+ 0.7%	156,626	+ 23.2%
#2	Honda CR-V	26,572	+ 14.1%	145,763	– 0.6%
#3	Chevrolet Equinox	23,645	+ 13.7%	126,397	+ 14.0%
#4	Toyota RAV4	20,540	+ 35.8%	101,274	+ 13.2%
#6	Jeep Grand Cherokee	16,626	+ 32.9%	80,796	+ 7.6%
#5	Ford Explorer	16,597	+ 13.5%	101,243	+ 30.0%
#7	Jeep Wrangler	16,165	+ 11.8%	77,728	+ 9.7%
#8	Nissan Rogue	15,518	+ 41.1%	79,051	+ 10.0%
#9	Ford Edge	13,579	+ 32.4%	68,971	+ 5.4%
#10	Honda Pilot	12,085	+ 21.3%	62,887	+ 14.6%
#11	Toyota Highlander	11,090	+ 6.9%	61,771	+ 7.5%
#12	Chevrolet Traverse	10,295	+ 7.6%	53,294	+ 9.1%
#13	Subaru Forester	10,170	+ 40.6%	50,748	+ 36.8%
#14	Kia Sorento	9341	– 13.7%	53,387	– 7.2%
#15	GMC Acadia	9174	– 6.3%	46,492	+ 10.3%
#16	Lexus RX	8647	+ 0.1%	45,818	+ 4.1%
#17	Nissan Pathfinder	8360	+ 209%	46,539	+ 203%
#18	GMC Terrain	8059	+ 3.4%	50,676	+ 8.7%
#19	Hyundai Santa Fe	7656	+ 14.2%	41,158	+ 19.5%
#20	Mazda CX-5	6856	+ 50.6%	38,057	+ 137%

Source: Manufacturers

These aren't deposits for 1,000 cars a month, these are actual sales of actual cars to actual people!  These analysts for TSLA are the worst kinds of idiots…

KING/Akad – Not a huge shocker there.  Even $20 is PLENTY for those guys.  

PLUG/Terra – Exactly what we talked about on 3/11:

March 11th, 2014 at 2:47 pm 

Big breakdown now – especially the RUT, off 1.3% at 1,185. 

PLUG/Wombat – LOL, what a pullback.  Good instincts.  Sorry it's late but I certainly would have pulled the April $4s and simply bought more stock if they went over $10 to cover the short calls.  Someone put out a very negative note on them and it's now being discussed on CNBC.  

Good example of why Rule #1 is:  ALWAYS sell into the initial excitement.

• terrapin22 (premium) 
  March 11th, 2014 at 2:50 pm | 

  Phil / PLUG – a big thanks to you and the others who put me onto this stock.  Listening to your mantra of take profits over the years has become ingrained in my trading strategy.  I got in a bit above 2 and had a 10 target which i thought it might hit in a few years.  Once it crossed 10 yesterday, I knew it was time to sell despite the short term cap gain tax implications.  Only in perfect world could you hold onto those gains for 12 months.  So I sold all my shares in both my trading account and my IRA for my biggest stock dollar value gain ever.  Sure i kicked myself a bit as it went back over 11 yesterday and today but now I feel completely relieved to be out of this stock and my gains booked.  I can always get back in once it stabilizes if that makes sense.  

  March 11th, 2014 at 3:01 pm | (Unlocked) |

  PLUG/Terra – Nice job.  Keep in mind you can always turn short-term gains into long-term gains by selling deep, long calls, like the PLUG Jan $4s at $3.80 with the stock now at $7.27.  So that's net $7.80 and it turns your sale (assuming you were selling here) into a long-term gain and you can still stop out if they fail to hold $6 and, if you don't end up having to buy back the stock on a cross back over, then you net $9.80!  Good trick if the situation comes up again.  



Oil/Purple – So far, bullish at $99.50 and bearish at $100 has worked like a charm.  We play a channel like that until it breaks.  I do think below $99.50 will be another bearish opportunity on /CL but it probably won't give up until after tomorrow's Nat Gas report.   

Watch the Dollar, now 80.225, below 80.20 is a chance for oil to go up again, over 80.25 could get us below $99.50.