Archive for 2006

Final Friday Report

Sorry my posts have been lagging this week but it’s been a hectic week leading up to my vacation. This will be my last post until next Friday as I will be far away and hopefully having way too much fun to worry about the markets. Although the Dow appeared to have a good day yesterday but a lot of that was the result of MO gaining 6% and XOM gaining 1.5%, adding $10Bn worth of value to the index. The S&P was also boosted by across the board gains in the tobacco sector as they scored a dismissal of a $145Bn lawsuit in Florida. Despite fairly good energy and commoditiy performance and a big move by tobacco, the S&P could hold an early gain over 1,275 and is resting just under it’s 50 dma at 1,274: http://finance.yahoo.com/q/bc?s=%5EGSPC&t=1d AMD cut Q2 sales forecast so forget the Nasdaq today! If I were around I would consider a short on the QQQQs but it’s a very risky momentum trade. http://stockcharts.com/gallery/?comp We can watch the Dow for a signal today as it is 40 points over the 50 dma of 11,180 but I was very, very concerned by the NYSE’s low open and inability to hold 8,200. With all the indices so close to their 50s, today will be highly relevant in setting direction for the quarter. The jobs report was much weaker than expected although wages are creeping up. This news is very stock postiive so anything other than a big rally will be a big disappointment. The dollar has stopped falling for the moment as it is still somehow considered a safety currency for Asian investors as they worry about another dozen test missles dropping in their back yards. Oil is hovering around $75 despite an unexpected build in gasoline stockpiles. You people just keep on buying gas, even at over $3 a gallon so the demand numbers are actually going up. We have record supply and record demand, if either one turns there will be a huge move in this sector. Natural gas has plummeted to $5.60 as the weather predicts a cooler summer, meaning less air conditioning and less hurricanes so it remains to be seen whether oil will follow suit. Gold broke $635 and the question of today is will they hold it? If not, coming into a weekend where Kim Jong Il remains at large, then it…
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Thursday Morning

Asian markets were generally down with Hong Kong being a notable exception on rising commodity stocks. Europe seems optimistic this morning and we will have to see how our own averages handle their technical marks. We are looking for the bottoms we didn’t hold yesterday to firm up a bit today if we should cross over: Dow 11,185, S&P 1,275, NYSE 8,200. Failure at these levels will send us crashing back down again. Will oil hold $75? Will gold break its 50 dma at $635? Both look very bullish and yesterday’s idiotic commoditiy sell-off may give us a chance to pick up some bargains today but my strategy is to hope they run up some more and then start shorting as I really don’t think $75 is sustainable (but I’m not willing to bet on it on a Thursday). This is a real do or die day for the market but I won’t be at all happy if we have another commodity led rally (not like we’ve had any other kind). My real concern though is that we will have no rally at all and set a very negative forward tone. As usual we don’t really care what the Dow does but let’s keep an eye on the S&P and the NYSE to see if we should play at all. I will not be playing as I have meetings but ===================================== In addition to the beaten down issues from Monday’s list, we should be looking at a couple of underperforming oil and gold plays but only if oil breaks and holds $75 and gold is up, even if only a little. Don’t forget oil inventories today so watch out for the 10:30 report and watch that Valero Rule! AU dropped 4% yesterday for no reason and I misprinted $55s when I meant $50s yesterday. The $50s are now 1/2 price at .80. SUN has been underporforming for good reason, they totally blew last quarter, but I think the refining issues should be behind them and this quarter should go much better. The $70s are $1.45 but watch the 50 dma at $70. SLB is resting on it’s 50 at $64 so I like the $65s for $2, stopping out if it dips below that line. PTEN is way oversold and the Aug $27.50s are $2.15. Business is good at the strip clubs: RICK is up 21% in June with a…
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Wednesday Wrap-Up

All the indices we tracked this morning fell below the 50 dma and stayed there yet everyone is spinning this as some kind of good thing. Maybe I’m missing something or maybe it’s another one of those times when I’m right and everyone else is wrong.

Had oil not made a spectacular mid-day comeback today would have been way over 100 points down as just about everything was sold off today.

Oil broke $75 per barrel which you would think is a bad thing but oil at that level was a spark for the early may rally we just had (remember when stocks used to go up?):
http://finance.yahoo.com/q/bc?t=3m&s=%5EDJI&l=on&z=m&q=l&c=uso

Gold sold off in the morning but recovered at the day’s end to hold the day’s high but someone was relentlessly selling miners this morning and buyers were shy about coming back in. It looked like a Euro fund based on the timing so maybe they know something that we don’t but I am now very excited (but wary) about some of the gold trades.

Next Monday is earnings and all this news will fade into the background but even the death of Kenneth Lay couldn’t change todays nuclear topic and nobody seemed very interested in buying on the dips.

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

TRMP stayed down all day and the Jan $20 puts finished at $2.50 (up 25%). I would expect 1-2% drops every day that Jersey keeps them shut down but a nice rebound when it ends – if we go into the weekned on strike it could be a disaster for them.

WMT took another 1% dip today and the $47.50 puts are now in the money at .95 (up 170%) while the August $47.50 puts have run up to $1.45 (up 95%).

Good call taking the money early on GM as it rebounded a bit in the afternoon. This could go either way in the short term but I’d be shorting Nissan if they actually take on this mess.

MRVL said “what 5% rule” and crashed right down to an 8% loss:
http://finance.yahoo.com/q/bc?s=MRVL&t=1d

Oddly, on a day like today, CME finally crashed through $500 again but still shy of it’s high. For shame on Google for being beaten to the punch…

My rail stocks are holding up as the economy is simply on fire but I want to see how tomorrow shakes out with all the strange…
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War on Wednesday

War! Nuclear war! Wow, talk about a fear factor, this is all they are talking about on the news…

Did you ever imagine we would be worried about North Korea attacking us? This will be a major test of market resolve, not today, but tomorrow if we get a bounce. It will also be worth watching today’s levels as we have many crosses to bear.

How low will the Nasdaq go? Will is hold 2125, where it began Thursday? The Dow is resting just above the 50 dma of 11,185 and the S&P is just above its 50 of 1,275. We should open below both of those marks and the real question is can we get back over it? The NYSE is also just above its 50 at 8,200.

We have indications from ADP that jobs numbers will be a blowout this month indicating the Fed is far from done but everything needs to be on hold while this Iran/Korea thing plays out.

Mark has to be happy as we will now see how high gold can really go but I would be taking this week’s profits off the table as this initial reaction is usually an overreaction. AU and MRB are still the lagging gold stocks and AU $55s make a momentum play at $1.95.

Oil, surprisingly is not going up on this new threat, yet another indication that we need actual supply interruptions to push past $75.

It goes without saying that we will have a weak open today. If we hold our technicals it might be a great time to pick up all those stocks we missed last week on the gaps. All of last week’s picks are still in play on a pullback as long as we don’t break further down on the 50s.

I’m still sitting on my GM puts and DIA puts from Monday afternoon but I’ll be getting out of both if there’s even a hint of the market holding up. My problem with this “rally” is the same as it has been, we never hit a good bottom and, as we discussed in chart school earlier in the month, we are just barely at the Fibonacci retracement point, not quite enough to confirm the bulls.

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

Cash, cash, cash and gold are the only things to hold in a panic but the reality is that the long-range missle test failed so Korea…
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Monday Morning

I was away so no weekly wrap-up other than to say Friday was very disappointing and I am very concerned about this week. We were worried about a Fed party hangover on Friday morning and that’s exactly what we got – the market woke up and quickly went back to bed on anemic trading.

The Asian markets posted small gains last night and Europe is trading flat to up so it will likely fall to US traders to set market direction. We can’t place any confidence in today’s action as most of the traders are off today and anything other than light volume will be surprising.

The Dow came to rest a bit under the 50 dma of 11,187 but was soundly rejected from that mark in intraday trading. The S&P bounced off its rapidly declining 50 at 1,262 in a set-up that does not look at all encouraging while the Nasdaq is 30 points away from being rejected by its 50 at 2,208. The NYSE posted the strongest gains but was also pushed down from its 50 dma of 8,200. With all these indices so close to critical tests, this short, holiday week is likely to set the tone for the entire Summer.

Oil is hitting $74 in the overninghts and gold is way up at $617 as the dollar falls off a cliff, crashing right through 50 day resistance to lose 3 weeks worth of hard fought gains:
http://stockcharts.com/gallery/?%24usd

Possible acquistion talks will boost Dow component AA today while GM is enjoying their rumor while it lasts with a 10% leap in share prices. I occurs to me that a pump-up like this give Kerkorian the excuse to finally dump his shares if they can’t form the alliance that he instigated in the first place.

Today should be an up day as there is no particular reason for it to go down and anything negative will be a big concern. With light volume we can assume that buyers will be scarce so sellers will want to hold out until Wednesday to get a decent price.

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

Now that the second quarter is closed we are back on earnings watch.

WMT had disappointing numbers again and should sell off. The $47.50 puts are just .35 but I prefer the Aug $47.50s for .75 bearing in mind that that is exactly the 50 dma.

AAPL is still out…
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Phil's Favorites

What kind of Brexit will Britain now 'get done' after Boris Johnson's thumping election win?

 

What kind of Brexit will Britain now ‘get done’ after Boris Johnson’s thumping election win?

Courtesy of Tom Quinn, University of Essex

The Conservatives’ victory in the UK general election is at once a decisive moment of clarity and a harbinger of uncertainty. Prime Minister Boris Johnson called the election with a pledge to “get Brexit done”, and with his newly-won parliamentary majority, he is now in a position to do just that.

The shape of Brexit has already been defined by the withdrawal agreement Johnson negotiated with the EU in October. It en...



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Zero Hedge

Bianco: Mom-And-Pop Aren't The Ones Getting Suckered By FOMO

Courtesy of ZeroHedge View original post here.

Authored by Jim Bianco via Bloomberg.com,

The current bull market is historic. According to Goldman Sachs Group Inc., it’s been 10.7 years since the last 20% correction, the longest such run in more than 120 years. In 2019 alone, the S&P 500 Index has surged more than 25%, with recent gains being attributed in part to investors chasin...



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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...



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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.
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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,

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Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 
Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices. The cycle below shows prices are ready to move in the months ahead (older chart re posted).




 

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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



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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

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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 ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Promotions

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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.

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