Archive for 2006

Not to worry but…

I hate to put a damper on the stock party we are all having but I have done a little reflecting on the jobs numbers and I am not very pleased with what I see.

While jobs came in at a very disappointing 108,000 this month, they revised last month’s job gains up by 90,000. While that may sound pretty good it also has to make you think that the entire gain they are claiming for this month may be wiped out by the margin of error they obviously had over the past 30 days.

Another downer is that 11% of the job gains this year have been restaurant and bar jobs, not the highest paying and also a very tenuous form of employment in a bad economy. Health care accounted for another 10% and those are not the best paying jobs either.

With health care you have to imagine that for every one person they hire, there must be another 10 people who are sick enough to need health care workers taking care of them so I read 21,000 health care providers hired last month as being 210,000 additional people who will be producing less next month.

Maybe these same people are moving off the unemployment rolls and into that twilight zone classification of people who are no longer in the labor force. If that’s the case, then 4.9% unemployment may not be a good thing at all!

On a yearly basis, wages and employment are still lower than inflation so the average American is falling behind, no matter how the White House tries to spin it…





Friday’s Finish

Wow again!

What a nice day that was… Even oil at $64.21 didn’t stop this train, that is certainly saying something!

I got into ABX as gold went over my $530 target but all our picks were up substantially today.

Let’s just get the reviews out of the way by saying that even I am amazed by how well my picks did this week. We have to avoid getting all giddy at these amazing stock heights but I am really looking forward to next weeks action!

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TOTD IBM continues up in the after hours, the Feb $85s we picked up for just $1.65 at the open (I have no idea why it was so cheap) went up to $2.25 at the close for a very nice 35% 8 hr profit! You know I hate to be greedy but we have until February so I say put a $2 stop on this one and just see what happens.

If I put on my hedge fund hat for a moment I would point out that you can sell the Jan $85s for $1.60 which will give you a free ride into 1/20 expiration where you have no risk at all. The call buyers are giving you a $1.65 premium so even if the stock closes at $90, you still make $1.65 but you would probably have to sell the Feb to pay off your caller. This is what you do if you are a hedger, lock in your gains, even if you cap the top. Of course if the stock only hits $85 on the 20th and then makes a move up in February you will feel like Carl Ichan….

IBM looks very solid at this point, this is a big breakout on strength for Big Blue and will be a big help in keeping the DOW up next week.

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YHOO did do better than GOOG today but you sure couldn’t have gone wrong picking either one. Even Google’s big end of day sell-off couldn’t put a dent in the $14 gain it ended the day with. For the record, the YHOO Jan ’07 $30s gained $1.60 for the day (13%) while the GOOG March $500s picked up $5.60 (50%) already. The $410 puts lost $3.50 so the net on the spread was 10% for the day – certainly not an awful thing to do with your money in a…
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First Friday

While I don’t want to put too much pressure on it, today may be the most important trading day of the year.

There are a lot of people who believe the adage: “As goes January, so goes the year” and “As goes the first week of January, so goes the month.”

Now we have a lot of cushion today, it would take close to a 2% drop in the indexes to turn this week negative so I’m getting very optimistic and I will predict a strong day today.

The foreign markets continue to show strength but a huge amount of money has been flowing into US funds and stands ready to be deployed but I still think there may be some correction first.

Oil is stubbornly rising today, getting dangerously close to $64. This will be great for our oil plays but bad for the DOW. There are no fundamentals driving the price up, inventories are well stocked and there will be a severe crash in oil (like nat. gas) if it doesn’t get very cold soon.

Gold had something of a rebound in Asia but it was the US markets that took it down last time so I will want to see it hold $530 before jumping back into our gold plays.

Jobs will be the big story today but I really see 5% unemployment as “full employment” so I think the weak jobs number will be great for the markets as it chases away the Fed.

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GOOG is on a tear, bashing through $450 yesterday and will have a lot of action into today’s CES presentation of “Something big involving media.” With the stock up $40 since Friday, it had better be a $10Bn idea!

Now I am certainly no Google basher, I called this recent action way back on 11/12 when Google was a TOTD and way down at $390 and my $3,500 price target for 2015 is still the street high (but others are catching up fast) but I do urge caution at this level.

We may see $460 today but it will be a very tough barrier to get past. Both GOOG and YHOO partnered with MOT to provide enhanced web services on the world’s most popular phones and I feel safer taking a position in YHOO at this point than Google.

With earnings coming up, I think YHOO will certainly beat estimates for…
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Thursday Wrap-Up

Well I got my Nasdaq number but Microsoft is still anemic and the other indexes were flat (better than being down) so I guess I’ll be more bullish – at least in tech.

All the indexes, other than the DOW, look like they can move quite a bit higher at this point but it takes the DOW a few days to adjust to a change in leadership (energy out, tech in) so I’m not reading too much into it. Today was a surprisingly low volume day for DOW components.

There is some worry that a lot of the Nasdaq action is the result of the CES show going on in Vegas this week. Google made a late day power move in anticipation of their keynote speech tomorrow turning up a pleasant surprise for investors.

Oil had builds across the board but only nat. gas suffered (great for DOW). If we can’t get oil back under $60 we can’t sustain a serious rally. Also, any negative FED comment will really kill the markets as they are now anticipating 2 more rate hikes and only maybe 3.

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I finally figured out why BZH keeps going up, 30% of the float is shorted and it is 95% owned by institutions – not a good combination for the shorts. There will be a hell of a reckoning on this stock but a lot of shorts will have to shake out first.

All builders had a good day, even WLS, based on some sort of misplaced euphoria over the Fed possibly winding down the rate hikes. I think the Fed is nearly done because the housing market is dying so it’s a tail wagging the dog kind of thing.

DOW turned out to be a great call this morning, posting a 2.6% gain with a low entry.

ATI racked up 3% for the day as TIE crashed so I never went in. It is possible that TIE is going down because of fear of ATI but it’s a tough premise to bet on.

So glad I tossed BVN at the top yesterday, I’m getting good at spotting these gold tops!

SIRI is kicking XM’s ass but not being rewarded for it. It is possible that this stock is just ahead of itself but I feel comfortable with a long position at this price. The fact that they gave Howard Stern $200M in stock today…
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CY – The Cat’s Out of the Bag!

I know I have been going on and on about since November but now, just 2 months after my first article on it, Herb Greenberg is telling everyone on MarketWatch about it too.

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BFA86978F%2D4949%2D441D%2D9F55%2D8E6050086CA5%7D

Look for the stock to retest $17 in the very near future, tempered by the Nasdaq and the performance of SPWR from which it derives half its value.





Thursday Morning

Last Thursday we stayed away from the market and it was a very good decision – even though signs were that we were going to get our “Santa Claus rally.”

We saved ourselves a lot of pain on Thursday and Friday and we picked a lot of winners on Tuesday but I am very concerned that that was the rally we had been waiting for.

The Nasdaq, S&P and Dow all bounced off resistance yesterday while oil bounced the other way, up from $63. A drop in inventories today can really lead to a market meltdown so, in the very least, let’s wait until 11 (1/2 hour after inventory) to see where things are heading.

Today should be the day that the big boys get back to work after a couple of days of meetings to decide where everything is going (this is why you are hearing so many analyst calls this week).

I would consider any kind of positive market finish today to be a very bullish sign.

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WLS was the first home builder to disappoint yesterday with a 7% drop in orders. A bigger sign of a problem was cancellations rising to 31% from 29% last year.

Hombuilders on shaky ground include LEN, BZH and KBH but all are generally very good companies and are very dangerous to short. Use WLS, TOL and HOV as an indicator of the overall market.

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CSC will rocket close to $60 as word is out that HPQ will be making an ridiculous offer of $12Bn. I don’t see this as being a very good idea for HPQ and be warned that last time there was a rumor on this stock, it was very short lived and dropped right back to $50.

BOOM continues to rocket since our early December pick, now I am sure it was just consolidating for a move up.

ATI should have a good year, watch for TIE as a leading indicator.

If natural gas prices stay under $10 today, DOW should do very well. The company is not getting the respect it deserves for incredible earnings growth of 50% on 15% more sales, even in light of record raw material costs. This is a company that will make more money this year than it has in the previous 3 combined trading flat to January ’04!

SBUX is up just $1 from where it was recommended on…
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Wednesday Wrap-Up

This is starting to look like a rally but I still have a nagging doubt or two.

The S&P made a new high – very significant! Big volume move up for 2 days.

The Nasdaq made it right over 2,250 on volume but I need 2,275 now to get back in. MSFT’s participation was lagging but there.

The Dow is the problem, rejected from 10,900. It needs to hold 10,850 tomorrow to stay in rally mode.

The dollar is dropping hard so don’t read too much into either gold or oil gains as 5% of them have been just a dollar adjustment this week.

Oil held $63 – this is my main problem at the moment as a run over $65 tomorrow can scuttle the markets.

Mortgage apps were down today and I expect pending home sales to look bad as well, this should send the builders back down – I will try to identify some tomorrow.

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YELL, sorry – YRCW had an amazing 4.7% day, almost worth the month I waited for it to move.

BVN went up so much I sold it. 10% in two days is plenty for me.

I don’t know what is going on with SIRI. At least it bounced off the 200 dma of $6.30 but only pathetically so and on strong volume. The last 2 times it dipped into the average like this it rebounded nicely over 2 weeks but it could go all the way to 6 before it turns.

Old TOTD BCRX is back in rally mode.

GOOG is up $30 in 2 days on good volume. The gutters are filled with people who shorted Google so just say no! The usual pattern dictates that tomorrow is the day for the naysayers to appear but so many people have looked silly saying this stock is done…

SRZ is up a whopping 10% since I put it on the watch list this weekend.

SPSS has been moving nicely since Friday’s pick. I like this one long-term.

AIR is also looking strong.

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Lots of retail news will come out tomorrow. Between that and oil reports we will have a very exciting day!





Wednesday Morning

Today is the second day of the rest of the trading year.

Obvious isn’t it? It should also be obvious that one day does not a rally make. The next few days are critical and will set the tone for the year so let’s all hope that we can confirm yesterday’s move as volume comes back into the market today and tomorrow.

My concern for today is a huge rally in Asia using up investing capital, especially on the Nikkei which went up 250 pts on a short trading day. Gold is also climbing and the dollar is falling.

Oil is pulling back a bit into tomorrow’s inventory report and on a resolution in the Ukraine but colder weather almost guarantees prices will remain over $60 for the winter. A larger than expected drawdown tomorrow can push oil back over $65 which could cause all of these gains to be given back fast. On the other hand, a build-up could be just the spark we need to confirm a huge rally so just sit back and fasten your seatbelts because it’s going to be a wild week!

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Expect satellite radio to be back in vogue this week as Delphi is leading a charge into Europe for an estimated $750M project that will be much harder to organize than the US ventures due to language barriers and international regulations. The logic will be, if they expect to make money with that, then maybe SIRI and XMSR might not be such a bad idea.

BF offered an extra $1.5Bn for EC. I don’t think the price is justified so look for some weakness in BF.

LOW was cut by JP Morgan today and could take a hit.

HAL looks very strong, especially if SLB maintains it’s new high – we can expect HAL to follow suit and break $68. A Barron’s article on insider selling may hold this one back though but it looks to me like it was mainly option selling and not a reflection of company problems.

XOM got a BofA upgrade today to $65, a target I agree with. Even after yesterday’s big jump, expect a serious challenge of $60 today.

We may be late to the party but TRID looks solid for another move up after tripling last year.

CY did very well yesterday but may have a hard time breaking $15 due to 57,000 open calls…
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Tuesday Wrap-Up

Wow, what a day that was!

The markets were up on good, but not great volume, retracing half of December’s losses in one day.

It is amazing to me how certain market moving events are coincidental with charts. Yesterday the Dow went right down to the 50 dma of 10,700 and stayed there until 2 pm when the Fed minutes (which were no surprise at all) “caused” a significant bounce back up.

http://stockcharts.com/gallery/?djia

Nasdaq had a similar bounce:

http://stockcharts.com/gallery/?$COMPQ

If you look at the above chart you would say – “Oh sure, anyone could have seen that coming.” My concern is that a similar bounce occurred on 9/16 and was followed by one of the worst weeks of the year with a 300 pt drop in the next 3 days. There was only one session last quarter where a 100 pt rise went unpunished, that was November 28th which was the start of the 700 pt November rally.

I use the Dow not because it’s a good indicator but because it is a familiar one and the numbers are easy to relate to – the other indexes mainly followed suit. We talked about this rally yesterday and the biggest positive I saw was that Microsoft actually did lead the Nasdaq higher.

We will have to see what Wednesday’s action will bring before making any major plays as all these gains can evaporate by week’s end.

I am still staying mainly in cash and taking profits – especially when they are as large as they were yesterday – off the table.

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Our TOTD NGRU gained 6% for the day but was nowhere near the best pick we made. Another 6% and I am out of this stock, no sense waiting for the 17th.

All things that glitter and anything oily were the best trades yesterday – aside from our usual picks, a monkey could have picked winners with a dart board. ABX is still lagging the group. GG needs to be sold on any gold pullback as it is way ahead at the moment.

http://finance.yahoo.com/q/bc?t=1y&s=ABX&l=on&z=m&q=l&c=gg+nem+bvn

Our coal plays went well yesterday with BTU, FCL and ACI all posting 4% gains.

YELL had a heck of a last day under their old symbol and will enter Wednesday as YRCW, which will confuse people for a couple of days. As the stock is right under its 50 dma of $46, it will…
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Trade of the Day – NGRU

Although I like JNJ a lot, I am nervous about the entire market despite this morning’s action and I think JNJ will open up $1 and will have trouble making it over the 50 dma of $61.30. If it breaks that level on volume, I will like the trade but that’s too many ifs for a Trade of the Day!

The play on NGRU, on the other hand is based on the company’s intention to distribute the sale of its REI division to shareholders of record as of 1/17.

The company is very small but has some value and your $1.1 purchase of stock will net you a refund of .85 on 1/27. I don’t believe that the stock will drop all the way down to .35 after the distribution but, if you are worried about it, you can sell on the 18th and you will still get your check for .85!

The company has $15M in sales, about 1/2 of which were REI related but will have no debt going forward and plenty of cash for operations which they are looking to sell off or wind into another company.

Should the company go up to $1.25, I will take the 15% and run, prior to distribution but I think selling right on the 18th may be the best way to go. Should the stock drop below .40 after the distribution, I would say it will pay to be patient and we will get our .50 eventually.





 
 
 

ValueWalk

#1 Performing Global Macro Hedge Fund Sees More Shorts Opportunities Ahead As China Bursts

By Jacob Wolinsky. Originally published at ValueWalk.

Crescat Global Macro Fund update to investors on 1/19/2019

Crescat Global Macro Fund and Crescat Long/Short fund delivered strong returns for both December and full year 2018 in a difficult market. Based on ...



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Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...



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Phil's Favorites

Divisive economics

 

Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his web...



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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...



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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

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

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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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:

 

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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...

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