Archive for 2006

Weekly Wrap-Up

Wow, we really pulled it out at the close!

Still ended the day well under 11K on the Dow and the S&P and Nasdaq’s week really didn’t amount to much in the end. If anything, this week made us look more, not less rangebound.

http://finance.yahoo.com/q/bc?t=5d&l=on&z=m&q=l&p=&a=&c=&s=%5Espx

While in now way a disaster, this remains what they call “a stock picker’s market“. Fortunately I am a stock picker so I am happy as a clam!

China’s Hang Seng Index is on a real roll, picking up close to 1,000 pts this month. While the Nikkei is in for a technical correction, don’t expect the money to come right over to our dreary markets, it looks like China may be in for another investing boom like we had over the summer (while our markets suffered).

Sadly we called the top just right on Thursday morning in “We are the World” and that premise continues to play out in the market action. I go into next week very cautious on my long positions but still seeing plenty of opportuinities for good plays.

=====================================

Most stocks were flattish for the week. I encourage you to look at the 5 day chart and put a sticky on top of your computer that says “2% is a very nice move, 5% is great – Don’t be greedy!” There is always another opportunity to make money so take profits when you can and have cash available for the next trade, you’ll sleep better too!

Take MER for example. We called this on Monday as a not quite TOTD (because I didn’t trust the market) and it ran up from $69.25 all the way to $71.25 (3%) on Wednesday. It pulled back to close at $70.95 on Wednesday which should have triggered a stop (lost 10% of profits) and on Thursday we said to get back to cash so that was certainly time to get out. While the stock may recover on a good market next week – wouldn’t you have been happier to just have the cash?

http://finance.yahoo.com/q/bc?t=5d&l=on&z=m&q=l&p=&a=&c=&s=mer

TASR is another good example – we called it a buy on Monday but by Tuesday afternoon I got rid of 1/3 of my stock at $8.75 and set a $9 stop on the rest, boy did I feel smart on Thursday! While I love this stock and am anxious to get back in, there is no reason to ride…
continue reading





Friday the 13th

Today will be a very telling day, will the Dow retake the magic 11,000 mark or will that remain the strong upper resistance level that may keep us rangebound for another year?

The Nasdaq is well above 2,300, a logical but unproven psychological resistance level and the S&P is well above it’s danger zone of 1,260.

The Asian markets are flat and Europe is down so my World Money flow indicator says there is cash available for US stocks but I think it may sit on the sidelines until a clear indicator presents itself.

Oil is being entirely held up by the threat of a nuclear stand-off with (coincidently, I’m so sure) the World’s second largest oil producer. This situation can only last so long because the truth is that there is no way Iran will stop selling oil, that would be akin to cutting off your entire head to spite your face. Iran is in a funny position because, although they produce a lot of oil, they do not have much refining capacity. This leaves them vulnerable to sanctions that restrict their imports.

Once traders realize that, boycott or no boycott, that oil will be delivered somewhere, then prices will spiral down – but do not bet on it because another “crisis” will bring it right back up.

Speaking of another crisis, Nigerian rebels are chipping in this week by attacking oil installations in that country. Notice the rotation of countries having “attacks” every time oil starts to tick down… BP seems to have this under control and that news should keep oil from running away today.

Today is the PPI report (expect same old low inflation) and the more important Retail Sales report (expect good but disappointing numbers until they count the web and gift cards) so the market should move up today. If it doesn’t, I will be very concenrned!

Gold is hugging the $550 resistance line all over the world. I am fairly confident this is consolidation for an up move.

Hedge funds got hammered last year and there is growing investor frustration as they find the funds are not as liquid as they may have thought. Expect this to be a boon for traditional investment houses as little new money will go into the hedges this year.

====================================

I’m looking for a rebound in the oil patch today if oil is above $64. We can…
continue reading





Thursday Morning

Oil is not going up in price, the dollar is going down in value.

Gold is going up in price and the dollar is going down in value. If I read my gold poker game correctly it is the American’s turn to raise while the once burned Arab markets continue to sell into strength.

We had a lackluster 5-year note auction yesterday, though not enough to panic the markets but it is one of the warning signs of a US meltdown. Expect a strong uptick in rates next month as the 30 year notes go on sale for the first time in years. More supply + weak demand = higher rates.

They are looking for another draw down in natural gas today and any build will devastate the gas markets but saber rattling in Iran is going to keep upward pressure on energy prices for now.

I’ve got to think that $65 oil is going to bother somebody some day so I’m being a little cautious coming into options expirations next week when stocks tend to make wild adjustments but it will take something substantial to derail this general uptrend.

We can expect, at best a slow start today with critical gas inventories and note auctions moving the market. The deficit was flat, which is better than expected but not enough so to rally the market today while unemployment came in about as expected.

=====================================

C cut LUV today, expect other airline downgrades as oil flirts with $65.

We called the dead bottom on KO at $40.31 back on Dec 29th, the stock has been up 6 of 7 sessions since but now it is running into the 50 dma of $41.75 so we may see a pullback here.

LAB is a nice play on the strength of the financials, they operate as market specialists for 600 companies and have not been getting respect for spectacular earnings growth.

BCRX had a nice pullback yesterday and may stay below $20 coming into options but I like owning the stock and selling the Feb $20s for $1.35 (a $2.50 premium).

I’m betting on little AMCC to turn a profit this year, riding up on great visibility at Mac World. I love this company because the CEO doesn’t take a salary and no insiders have sold since last Feb. Institutional ownership is rising steadily so, although I would prefer a pullback…
continue reading





We are the World

The Nikkei is up another 80 pts today, that’s 1,650 pts since Dec 1 which was up 1,500 pts from November 1, which was up up 1,500 pts from September 1, which was up 1,500 pts from August 1. I am not making these numbers up, it went up exactly 1,500 pts in 3 consecutive segments!

In that same time frame, the DJIA is up 500 pts and we have the nerve to call this a rally! Japan pays the same amount of money for oil as we do as well as other materials, they have a similar population with similar lifestyles… So what do they see that we don’t?

While the Dow had outperformed the Nikkei from ’01 to ’03, they went flat together in ’04 but there was a total disconnect in ’05 where the Nikkei outperformed us by a fat 40%.

http://finance.yahoo.com/q/bc?s=%5EDJI&t=5y&l=on&z=m&q=l&c=%5En225

This is what happens when even Warren Buffet has no faith in the dollar. World investors fear that there will be a collapse in the US Asset Markets (perhaps because we have been crying housing bubble for 3 years) and, as a result, the US Dollar. This causes international investors to consider a good company in Japan to be worth considerably more than a good company in the US.

Japan is a country with a declining, aging population and rising health care costs and exploding energy prices (they are having a harsh winter). They endured Tsunami disruptions this year as well and they are just as worried about terrorism as we are (remember the Tokyo subway attack?).

I think the real difference is PR. US news is so negative and based on scandal and dirt digging that you can’t help but get the impression that this country is on the brink of disaster.

Try to name something bad in Japan – something that would stop you from investing in a Japanese company… Not much right? How about other Asian countries? Europe (maybe one or two things)? But think of reasons not to invest in the US and JACKPOT!

This is why the hottest markets are the ones we know the least about. Your broker advises you to invest in Asia or Europe and you say sure but an Asian broker tells a client to invest in the US, with it’s 6 consecutive flat years and the money is just not going to come this…
continue reading





Wednesday Wrap-Up

This is very good!

What we have here is the exact opposite of what we had last year. The market is shrugging off bad news and reacting very positively to the slightest positive indicators – that’s what a rally is!

We got just what we wished for with oil this morning, a number that allowed everyone to win.

The Dow was able to shake DD, the latest to use the “hurricane ate my quarter” excuse as well as GM’s normal sadness. The Nasdaq had a fantastic day led by Apple but there was great general participation. Intel and SNDK looked downgrade proof today as well.

=====================================

Microsoft was resolutely up all day and looks very strong, the $27.50s are already up 25% but we’re not in this one for a quickie.

Taser took control of the $9 mark and conquered it on the first day, a very powerful move…

EK is still one of my favorite stocks.

ALTS picked up 2% and gave us a very nice entry today.

CY had a very weird after hours drop back to $15.66 – we need to watch that closely tomorrow. It’s probably nothing but it’s also nothing to ignore.

Every once in a while, usually when Google is high, they start with the click fraud stories – it’s back in the news again so watch out for a stutter in GOOG.

MCD was lovin’ us with a straight up 1.75% gain from the open. Our March $32.50s picked up 10% already!

KMG picked up 3% so far with their stock buyback. They also had their credit rating increased.

ABX went down a bit today on concerns that they may have to up the compensation to PDG shareholders to complete the transaction.

ATYT is doing the option expiration shuffle around $17.50. I like offering $1.80 for the Aug $17.50s and waiting for an up oscillation and selling the Feb $17.50s for .90.

COST April $45s are up 10% already in just 48 hours, I am now much more confident that we caught this going the right way.

HD picked up another 3% today and the Feb $42.50s we picked up yesterday are already up 65%. Set a stop at $1.25 but I doubt we’ll need it!!

As usual, I love GLW!!! Another 7%, please, no, thanks, I’ve had too much already… I sold half when it pulled back this morning but the remaining…
continue reading





Wednesday Morning

DD is whacking the Dow this morning with a big disappointment, we will see if this throws a damper on the whole party. The Dow looks very strong and it will be important to see how it handles this mess. It is very good to test the index strength against bad earnings from a component so I am very excited about today!

China’s trade surplus tripled to $102Bn last year and you will be hearing a lot about that this week but keep in perspective that this accounts for just 6 weeks of our trade deficit even if their trade was 100% with the US! By the way, it also counts as trade when our own companies set up plants in China to make cheap stuff to send here so these pundits really need to get a life…

Oil will make or break the rally today. We need a goldilocks oil report: not too hot – not too cold so neither the blue chips or the oil companies get crushed. They are predicting such a large build up that I doubt there will be a downside surprise in inventories.

Gold took a world bounce off the low $540s and, if it crosses $545 on our exchange today, then our gold plays will all look nice. ABX may be good for a day trade, especially the $30 calls for .50 if gold trends higher.
=====================================

KMG says they are undervalued at $94 and will buy 9% of their stock back. Thank Carl Icahn for forcing this company to step up as he has been pushing them to increase value since way back at $55 last year.

The company is also paying down debt and taking charges against the quarter so I think they are trying to avoid an embarrassment of riches. All the oil companies are sandbagging this quarter to avoid another round of congressional hearings. If BP doesn’t go down off of their warning, no one will.

=====================================

JPM finally got around to reading my column and has downgraded SNDK to neutral. This stock
is currently the poster child for overbought with a run from $45 to $77 since 12/11.

UBS is first on board the Apple upgrade train, raising their target to $100. Expect Apple to hit $90 very quickly.

MCD will be announcing a plan to increase values next week. With earnings coming on 1/23 I…
continue reading





Tuesday Wrap-Up

A significant late day rally saved the indexes and gave us (technically) another day of gains, albeit flat. Index consolidation at these levels is flat out exciting for the market’s future!

I am going to take a very rare position on DIA (Dow Index Trust) in anticipation of another major move up. The spread between the FEB $111s for $1.15 and the FEB $110 puts for $1.35 looks attractive as a 200 pt move in either direction over 40 days makes a profit. The puts will hold their value on a move up but the calls will quickly deteriorate on any downward move.

There is a lot of short pressure piling in on the QQQQs (Nasdaq Trust) but I am in no mood to short today.

Apple, not Microsoft, led the Nasdaq with Steve Jobs wowing the crowd at Mac World more so with sales announcements (a first) than with what turned out to be an impressive array of products. A real market rally has multiple leaders and we have AAPL, HPQ, TXN, MSFT, SNDK, RIMM, AMD, AMAT… trading leadership day after day. DELL has been a real laggard and should move soon.

Gold dropped as expected and while oil was flat, the oil sector was flying – I was very pleasantly surprised with my Haliburtons today!

=====================================

MTH was a sector outperformer and HOV came right up off a bad open. I made a typo this morning when I recommended BHI in the homebuilders instead of BHS, who had a great day but BHI is a great oil company so no biggie!

Lehman gave a massive upgrade to Haliburton (target $80) and 18 other oil companies, notably raising the following price targets:
KEGS – $19
NOV – $82
OII – $60
SLB – $124
TDW – $65
WFT – $49

I’m waiting for $65 oil before jumping back in here except for HAL, which I am not ready to sell yet (at least until tomorrow’s inventory).

=====================================

ATYT should go up but I will wait to see if it pulls back to the 50 dma of $16.50 with a buy at around $17 as it turns back up. I am almost confident enough in this move to buy the $17.50 puts while I wait but the premium is a bit high at .40 (.52 premium for 8 days).

COST has flatlined for the…
continue reading





Tough Tuesday

Well correction day is finally here.

The Nikkei had a 300 pt sell-off on slowing consumer spending in Asia and the rest of the world markets are in pullback as well so, at least for the morning, we will be down.

The key to today is how far down will we go?

AA was disappointing yesterday and UTI got a downgrade and GM gained too much yesterday to hold so it will be critical to see how the Dow performs around that magic 11K mark.

The Nasdaq is up so much that it only needs to hold 2,3000 (an 18 pt drop) to impress while the S&P looks safe as long as it remains above 1,270 (a 20 pt drop).

Any sort of positive finish to the day will be an all-in signal to the markets and the strength and momentum are sure there but we need to watch volume as much as direction today.

Gold is pulling back just a touch in Europe but it was the US market that took it down last time so that movement will be more telling.

Oil is defying all logic (maybe Iran is today’s excuse) by continuing to rise in price even as supplies continue to build.

DHI will lift the homebuilders today with great projections. They had a huge $3 gain yesterday and are up 30% from our November 16th selection. I’m liking HOV, BHI and MTH for movement today but only for trades as one bad word from another builder or the Fed can have the opposite effect on the market.

I’ll be away today but I’m staying in cash until the Nasdaq turns positive, then I will go bargain hunting!

Good trading,

- Phil





Just Another Manic Monday

Now it is starting to look like a rally!

Nice strong finish across the board, Dow 11K (finally), Nas comfortably past 2,300 and S&P just flying to 1,300 – I love it! The Nasdaq performed so well I am hardly concerned that Microsoft and Apple sat this session out.

Gold hit $550 today and closed at $549 so hang on to those stocks! Do not be swayed by the massive manipulation that goes on in that market, they have to go up eventually. BVN was again a shining star in the sector.

Oil even behaved itself by coming down a bit to $63ish, not enough to hurt oil stocks, so you could not have asked for better conditions.

Homebuilders are rallying on a sudden burst of positive analyst reports saying the housing sector will still be hot in ’06. If that is true, we need to start planning our Dow 12,000 party real soon!

=====================================

Everything worked today so I’ll just do the highlights:

Google did hold the $460s but only after a real scare in the afternoon. I shorted it in the morning at $471 but chickened out when I had to go to a meeting at 1pm so I missed the nice drop but there was no way I was going to leave this trade unattended! Just an hour later I would have had a double on my put…

If you followed Friday’s TOTD IBM through you either stopped out at $2 for a 22% profit or you hedged and sold the Jan $85s for $1.60 which would have netted you a gain of .55 against a .50 drop in the Feb $85 call for another 7% gain even though the stock went $1.22 against you! Hedging is fun!!!

BCRX flew up 8.4% today.

EK went up 5%, great timing on this morning’s call as it gave us a great entry.

GENZ gave pretty good preliminary results but expectations were very high so we will have to see how they are digested. My attitude is that 22% revenue growth is pretty good, even if it does miss expectations by a bit.

BBY continues to rock with another 1.5% gain.

SYMC tacked on another 2%, now in a confirmed rally.

Back on 11/14 I said SNFX could be bigger than big if their product works and apparently it does – the stock gained 11% today on a very strong…
continue reading





What I like this week

RBAK is a telcom equipment supplier that is growing fast and should post its first profit this year on 25% sales growth.

XMSR got a huge DB upgrade today to $33, this may help SIRI as well.

CSCO is finally getting some recognition from Prudential, who are looking for $24, but it is already way up from my original call back at $17.25.

Chip maker MRVL still looks great, watch INTC and TXN for market direction.

AAPL may have another good day in anticipation of Mac World tomorrow but watch out below if their new offerings don’t impress. High put prices confirm the general state of anxiety on this stock.

4.9% unemployment means CDI could bounce back. This is a very volatile stock that MIGHT be bouncing off its 200 dma of $25.25 or not…

MRB is still a class act in the mining sector, even though it is up 30% from our original pick. Do not buy into any gold positions if we don’t hold $540! Gold is currently trading at a huge historical premium to silver so if gold continues up, we need to look into silver stocks.

Old TOTD PLAY should get some play coming into Mac World and announcing the expected strong results. Sure it’s up 50% from our November pick but 1/3 of the float is still shorted and earnings are coming out on the 26th so we can expect a lot of covering between now and then.

JPM downgraded AMZN on slowing US growth. If the stock goes below the 50 dma of $46, it has little support all the way to $41.

MER is poised for a nice run up and would be my Trade of the Day if I had more faith in the markets.

DUK also looks smart dumping some low performing assets.

BSX goes back to being a sell as they press on to buy GDT for too much money while their own sales fall below flat. JNJ will sell off as well as investors are concerned they will be pressured to match the offer.

TYC is moving well on break-up plans.

DOW continues on its roll as natural gas prices remain tamed.

GM got a GS upgrade that will bring a lot of money back in and will really move the DJI today. People buying this stock are nuts!





 
 
 

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 ...



more from ValueWalk

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...



more from Tyler

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...



more from Ilene

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...



more from Kimble C.S.

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...



more from Bitcoin

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 ...

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

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...



more from Chart School

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 (...



more from Our Members

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.

...

more from Biotech

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...



more from M.T.M.

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 ...



more from OpTrader

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 >>