Archive for November, 2005

Tuesday Musings

CY – looks like today’s the day!

IMAX – finally overcoming the sellers.

SU – I missed this one in my oil picks, goes up and down directly with price of oil

TIVO – people are warming to their new plan. Apparently the Financial Times read my column yesterday and published an almost identical one today!

If you didn’t yesterday, take those housing profits off the table today, rates may go up greater than expected.

I don’t think TWX is actually going to sell AOL. Maybe a partnership with MSFT or GOOG, that might be a win/win if MSFT but GOOG is already a defacto partner so they can only lose. I would think Microsoft wants it more and they are much richer (have you ever won an auction against someone who wants it more than you and is much richer?).

BA will be the clear winner as US airports will not put up with the Airbus 380 on many levels.

Canada Bird Flu scare = BCRX back in play.

If SBUX blows through its high of $32.13 then Buybuybuy (but I told you so on Sunday)

There is a line around the block at NY ToysRUs for the Xbox.

WFMI is looking like its overbought again! I would love for it to fail to test its $152.67 high so I will be watching it closely. It may be out of gas right here though.

XTO is another oil play I like.

There is a rumor that Intel/Micron are already in bed with Apple, this will really rock MU stock if true because it’s all about the future.

I think this is going to be one of those days where the market gains strength all day. I know I’m the only one saying this but I feels it in my bones!





Trade of the Day #2

OMG – I forgot all about BTU!

Every time they get to the low 70s (well, the last 4 times anyway) they bounce back to $80.

The stock did this even as oil was going down, with oil going up I will be buying with great confidence the December $75s for $4.40 (an outrageous $2.80 premium) and looking to get out as the stock hits its 50 dma of $78.75 (but probably with a .50 trailing stop).

Remember the Valero Rule for all energy trades! Should not be an issue today.

MU will also be a good mover today, but we should have gotten it yesterday when the announcement of their partnership with Intel put a knife in SNDK.





Mid-September Redux. Trade of Day

Get out of your profitable trades (and your unprofitable ones) today and let’s sector rotate into oil!

The Dow is toast if oil holds $1 rise today but oil companies are still a bargain at today’s prices and many of them are sitting just on key inflection points that can give them a strong boost.

Remember the Valero rule though – no trades on oil unless VLO is up and get out when they turn down!

You can almost give a monkey a dart to pick this sector but let’s call the following my favorite quick movers:
RD and RDS.A
CVX
XOM (no, really)
PTEN – it was just a small scandal….
MUR – last week’s pick
HAWK
DO
HAL – last month’s pick, keep buying until they’re indicted!

Which brings us to our Trade of the Day:

NGS was at $40 just 6 weeks ago and plunged to $19 last week on bubble bursting reporting. They had a sharp downturn on Wednesday when oil reserves came in high so watch out for a selloff but today is going to be their day!

With today’s storm in NY, they have a pretty clean run ahead of them all the way to the 50 dma of $27.50. They are not optionable so there will be less weirdness in the price action but a $5 move on this stock should make anyone happy! With a p/e of 50 and gas in plentiful supply, I wouldn’t hold onto this to test the ma. Actually I would recommend taking 10% and running on this one with your finger on the trigger at 5%.

Today could be a false run on oil into tomorrow’s inventories so trade carefully. Remember that making 5% in one day is making 1,000% per year without even compounding so have realistic expectations…





Metallica Rules!

They opened the new Dubai Gold and Commodities Exchange today so gold should easily cross $500 this week (as I predicted last week).

There are a couple of reasons for this, one just being that a new trader in town has to end up with some product in his sack so X% of all the gold in the world will come out of circulation soon.

DGCX director Ahmad Bin Sulayem said “We have heard that the gold traders in London are looking forward to this exchange and that he made us feel really optimistic about this project.”

Yah, it’s kind of like the way everyone looks forward to a new guy with a lot of cash sitting down at the poker table!

This brings gold closer to a 24/7 trading operation which in itself will be destabalizing but, just like the Chineese trader who just got pantsed in copper, I am expecting that the experienced traders will be looking to take back some of those petrodollars real soon.

Expect to hear “Gold gold gold” in the press for a while so this will be one of those “rising tide lifts all ships” scenarios but watch out because someone is going to pull the plug on this and the poor Saudis will be left in an empty tub with nothing but their golden duckies to show for it.

Laggard gold stocks (for a quick in and out trade) include GSS (who can’t make money), HL (one of the worst rated stocks in the Zacks universe) and BVN (which is actually a great SA company with 20% growth).

Aside from BVN and last week’s pick GG, I also like new miner with a cool name, Metallica (MRB) a whole lot, their $1.8 stock price does not begin to do justice to the $9M they finally pulled out of the ground last quarter (40x prior yr qtr) and the .12 per share they made selling it. Four quarters like that and you will have a p/e of less than 5!!!

A nice bonus for this company is that, in their Mexican mines, where they aren’t hitting gold they are hitting (awww) COPPER! All of the company’s estimates were based on $400 gold and $1 copper. With gold at $500 and copper at $1.80 this company is way undervalued.

The company has just over a Million ounces of gold in La Fortuna but
continue reading





Restock on Overstock

OK, I’m so sorry I missed this one. It was on my list of things over the weekend and I just forgot…

Well, that and $4 will get me back the day I missed on OSTK, a poor man’s Amazon that is still $37 off it’s high of last Thanksgiving.

I don’t like the company, I don’t like the web site, I really don’t like their financials, I don’t like them whining about how people are conspiring to lower their stock price… but I will be buying some tomorrow due to the intense momentum I am seeing.

Someone else saw it too because on November 7th Director Jason Lindsey loaded up and bought 20,000 shares on the open market for $33.50, there’s an insider you want to follow!

This is not a game for the faint of heart but, since the last two days action have taken everyone (except Lindsey) by surprise, there is not much premium on the Dec 40s (just $1). If this holds up tomorrow, I will pick some up because this stock was very heavily shorted with about 10 days to cover and the $10 jump in 3 days has got to be killing the short players.

This is very speculative and I could be dead wrong but I also could be looking at another $5 move in the price which would more than double my option.

I will call this my restricted* Trade of the Day due to it’s extreme danger but I really think that the momentum on this one is not going to reverse quickly. Refer to the comments on this article for a blow by blow in case this turns ugly!

*restricted to a very small gamble with your finger on the sell button, you cannot leave this trade alone and, even if you watch it, it might rip your investment to shreds





Bottom Fishing

These are not picks, they are trade ideas if you have money to waste on a long shot!!!

In all cases you take 20% and run like hell….

CVC – It’s not losing money when you depreciate $1.3bn!!! They also goosed operating expense to scary levels but I’m dubious about that as well.

AGEN – One day, one of these companies will actually cure cancer. People lost faith in this one just as they finally started a trial.

FMTI – Another biotech to put away for a rainy day. They were at $8 in ’04, I think $1.80 is about the bottom for these guys (but you never know).

JAS – everybody loved them, now everyone hates them. With a p/e of 10, I kind of like them.

FRN – Friendly’s for Pete’s sake! Sales are down but profits are up, I have no problem with that.

CRMT – It’s the auto makers that are losing money, not the sellers…

SGY – You would think the hurricane wiped out the whole company!





Monday Wrap-Up

Had to work today – I hate that because I always feel like I might miss something.

What I missed was a hell of a day and a great chance to get back into oil but cest la vie, there is always something else to trade tomorrow.

Microsoft was off to a scary start, I really don’t know why other than when a stock is up for 30 straight days, people keep expecting a pullback. They had a very bullish recovery and XBox season officially starts tomorrow.

Google – I stopped out of my short! This stock kills me but my long position looks great. Thanks to UBS analyst Ben Schachter for ruining my short party with his $500 price target!

The Dell trade was a go right at $2.90 so gl if you’re in it.

Amazon being flat on a great day like this supports my thesis – stay away!

My home picks returned an average of 3%, not bad for a day’s work!

EK – even though it shouldn’t have been a trade I still picked up the Dec. $22.50 for .75 (do as I say not as I do) – I’m already out .20 for not following my own advice.

SBUX – great day!

WMT – Jan ’08s picked up .10, stock looks very good.

BTU – woke up today

SNDK – I told you so!!! Holy cow what a mess today!!!

Tivo – if I stopped just one person from overpaying, then I’ve done my job…

TWX – very disappointing. Especially since, it seems to me, that if AOL has 24M subscribers who pay $20 a month, that’s $400M a month. How can they not make money on that? No growth I guess…

Cramer is making a great point right now, he’s saying that you will never buy anything over the net that doesn’t get shipped. And who ships it? UPS, 9 out of 10 times! I think I mentioned them a few days ago but I still think Yellow has the best run coming in that group.





Monday Morning Quarterback

Just my stray thoughts for the Day:

Tivo may get a bounce off the news with Apple and Sony connectivity but they do not actually have an agreement with these companies or, more importantly, with the content providers so sparks may fly. While I think apple may not care much (or may actually love it), I think Sony and other content providers who are counting on selling these programs to portable users will have a tantrum that may end up in court.

IMAX should get a nice pop today but the $9.75 200 dma will be a tough barrier. The company is certainly no bargain but has consistantly channeled between $8 and $11 so the smart money is on it heading back to 11.

GSK is down 5% in Europe today after dropping 4% here on Friday on new warning requirements on their #1 drug but that doesn’t seem to merit this kind of drop. Maybe people know something. I always worry about drug companies with 53 p/e’s!

Gold is going to hit $500 and make a lot of news. See last week’s Goldplay article. Barron’s finally got around to reading my posts: http://online.barrons.com/article/SB113235754691601940.html?mod=9_0030_b_this_weeks_magazine_main

I’m a little leary about BIIB’s current price. Like the stock or not it is down 40% for the year and may succumb to tax-loss selling before the end of the year. Logic is, you were down 50%, got 10% back so you sell, take the loss against other gains and then buy it back in January. The same could be said for Elan but it’s not as widely held and is still off 70% for the year.

BA is looking really good with a lot of orders coming in from the air show. Expect them to go to $70 (new high) before pulling back today. When a big company goes up 5% in one day people tend to get out for purely technical reasons.

HAL is looking very good at this price. If it breaks through $62 today I’m in.

Google is looking like my put will be working today but this stocks scares me~

GM is going to have a press conference, I hope they say lots of nice stuff so people buy it again so I can short it again for when people get around to actually looking at the company instead of listening to the executives saying “don’t panic.”

I am…
continue reading





All the Coffee in China

My English grandparents would often say “Not for all the tea in China” which is an old expression that equates to “all the money in the world.” Tea came to England from China and India back when Marco Polo had to carry it on a donkey but the country became addicted fast and for centuries England had a tea economy.

Now this didn’t happen all at once but, even in America, we have a passing familiarity with the East India Tea Company. Founded in 1600, the company gained a monopolistic control over India and the surrounding countries and eventually grew so large it had its own army! It was the East India Company’s tea that our patriots dumped in the river during the Boston Tea Party .

So love them or hate them, that East India Company made a lot of money for a couple of hundred years, that’s longer than most empires last. Like many empires the demise of the EIC was a result of overexpansion (in their case into being a quasi government).

But I titled this all the coffee in China for a reason. Sales of coffee in china is rising 50% per year and the vanguard of this expansion are two foreign companies: Manabe, a Japanese concern and Starbucks, our local boys made good. between 2000 and 2004 Starbucks China business increased 814% and they are just getting started with a little over 100 outlets out of their 10,241 worldwide total.

The big knock on Starbucks has been that people won’t keep paying that kind of premium for coffee but we have seen this year that they will. Gas can go to $3.50 a gallon but Starbucks will still have a record quarter. Frankly, it makes the coffee seem cheaper when it’s less than a gallon of gas!

But can Chinese customers afford that?

#1 – They pay less than we do. Employees are Starbucks’ largest expense and cheap Chinese labor allows them to sell much cheaper coffee over there. Don’t forget, Starbucks is in the business of exporting coffee, the shops are just bonus money for them.

#2 – It’s cool. Starbucks is the Al’s Diner (Happy Days) of China. Where the heck else are they gonna go? Heck, we go to Starbucks and we have our own cappuccino machines at home with 40″ TV’s in our living room and cool stereos and stuff, yet…
continue reading





A Kodak Moment?

Barron’s had a very flattering article on Kodak’s saying the beaten down stock may double over the next 3 years (they have to rise 55% just to get back to where they were in January).

With 3 holds and 6 sells out of 10 analysts covering this stock and the stock trading at a 25 year low of $22, I think it is time to be the wolf amoung the sheep and take a piece of this one!

Sales were up last year and this year and the company will be doing a special investor event at the CES show in January so I think they are serious about addressing valuation issues.

The company has 95% institutional ownership, which has actually increased the last quarter and is heavilly shorted.

Forward p/e is around 12.5 giving the company, with $13Bn in sales and $1Bn in losses, a market cap of $6.3Bn. If we assume the losses are really from the restructuring, a return to the normal $500M in profits would be a huge boost to the stock. I’m liking the look of the restructuring because the company, although very late out of the gate, is the leader in Digital camera sales with a 22% market share.

I assume they have some kind of plan so I will be looking at them long before the CES show but I think the Barron’s article will trigger a sell-off as fast as it triggers some buying.

I am going to go for the January $20s for $2.55 (a .70 premium) and will be looking to get out as soon as I pick up 20%. No trade if it opens down or if it gaps up past $22.50. There will be heavy resistance at the 50 dma of $23 but above that it could have a great run.





 
 
 

Phil's Favorites

Powell Spews Baby Poop In Attempt To Reassure Investors

 

Powell Spews Baby Poop In Attempt To Reassure Investors

Courtesy of  

Let’s look at a few of Chairman Pow’s words at yesterday’s press conference. Please read them and tell me whether this sounds to you like a man who doesn’t understand what he’s doing. Or if you think he’s deliberately pulling words out of his ass, stringing them together, and spewing them from his mouth in an effort to gaslight the investing public.

I’ll take the latter. The Fed is in the propaganda business. It knows what it is doing. Double talk, lies, and utter bullshit are its stock-...



more from Ilene

Lee's Free Thinking

Powell Spews Baby Poop In Attempt To Reassure Investors

 

Powell Spews Baby Poop In Attempt To Reassure Investors

Courtesy of  

Let’s look at a few of Chairman Pow’s words at yesterday’s press conference. Please read them and tell me whether this sounds to you like a man who doesn’t understand what he’s doing. Or if you think he’s deliberately pulling words out of his ass, stringing them together, and spewing them from his mouth in an effort to gaslight the investing public.

I’ll take the latter. The Fed is in the propaganda business. It knows what it is doing. Double talk, lies, and utter bullshit are its stock-...



more from Lee

Zero Hedge

Visualizing The World's Stock Market's Performance For The Past 30 Years

Courtesy of Jeff Desjardins, Visual Capitalist

Charting the World’s Major Stock Markets

Most investors around the world are familiar with the S&P 500 index.

Not only is it the most widely accepted barometer of U.S. stock market performance, but it’s also been on a 10-year bull run, now sitting at all-time highs near 3,170.

This week, we chart those historical returns, and then use the U.S. benchmark as a backdrop to compare other major stock markets around the world, such as those in Europe, Asia, and Canada.

Putting Them All at Scale

One challenge in comparing global markets directly is that all indices are on arbitrary scales. ...



more from Tyler

Chart School

Funds are getting ready to move out of USA

Courtesy of Read the Ticker

Just before the hang over in the US equity markets, money will move and take their well earned gains else where. Here is why.

More from RTT Tv







Charts in video.

US is in the late cycle boom.

Click for popup. Clear your browser cache if image is not showing.




US stock market with the US dollar, they have risen together from 2012. A change of this will force money to move.


Cli...



more from Chart School

Kimble Charting Solutions

Euro Breakout In Play? Gold Bulls Sure Hope So!

Courtesy of Chris Kimble

The Euro has spent much of the past 2 years trading in a down-trend.

Though precious metals like Gold have fared well, this has been a bit of a headwind because it means that the US Dollar has remained firm.

Big Test In Play for the Euro

The Euro is testing a confluence of important support just as the downtrend is narrowing and ready for a “break”. That support includes lower falling wedge support and the Euro’s long term up-trend support line (see points 1 and 2).

If the Euro can succeed in breaking out at (3), it would be bullis...



more from Kimble C.S.

Insider Scoop

8 Healthcare Stocks Moving In Friday's Pre-Market Session

Courtesy of Benzinga

Gainers
  • Sarepta Therapeutics, Inc. (NASDAQ: SRPT) stock surged 36.4% to $137.00 during Friday's pre-market session. The market value of their outstanding shares is at $6.1 billion. The most recent rating by Janney Capital, on December 13, is at Buy, with a price target of $175.00.
  • GlaxoSmithKline, Inc. (NYSE: GSK) shares surged 1.1% to $46.44. The market value of their outstanding shares is at $112.9 billion. According to the most recent rating by UBS, on November 21, the current rating is at Buy.
  • AstraZeneca, Inc. (NYSE: ...


http://www.insidercow.com/ more from Insider

Digital Currencies

Three Men Arrested In NJ For Running Alleged $722 Million Crypto Ponzi Scheme

Courtesy of ZeroHedge View original post here.

Authored by Kollen Post via CoinTelegraph.com,

United States authorities in New Jersey have announced the arrest of three men who are accused of defrauding investors of over $722 million as part of alleged crypto ponzie scheme BitClub Network, per a Dec. 10 announcement from the Dep...



more from Bitcoin

Members' Corner

Tobin Smith: Foxocracy, the 2020 Election, and the Stock Market

 

For decades, Fox News has been spreading false information and hooking its audience into an angry, xenophobic and paranoid worldview. It's no mystery that Fox was instrumental in the 2016 election -- but how did it do it? How did it gain so much influence? Tobin Smith, CEO of Transformity Research, Inc. and former Fox News contributor and talk show host, explores this phenomenon and discusses Fox News’ emotionally predatory and partisan propaganda media strategies and tactics in his new book, ...



more from Our Members

The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



more from Tech. Traders

Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



more from Biotech

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>