Archive for 2006

Friday Morning

Let’s get ready for an exciting options expiration day today!

Oil is well above $67, casting a pall on the world markets in general. Today will be another big test for our markets which are just barely holding onto some weak technical positions.

Oil plays should be on today but follow the Valero rule to the letter or you can get very burned. Remember that there is no technical reason behind these oil prices and an actual attack on US soil would likely lessen demand, not increase it.

As much as I hate to mention it, if there is an actual attack, be prepared to short stocks that were down last time. I know it’s gruesome but it can save your virtual portfolio. Travel stocks are the easiest targets (there was a rumor that someone shorted the airlines just before the attacks) and take the longest to bounce back but also watch out for the retail sector.

Consumer confidence is at a six month high so go figure, that usually would provide a boost but the market always looks forward and that view could use some help.

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Cash cash cash today! The markets look very scary so maybe just some oil and gold trades until this puppy turns up (which I think may happen if Europe closes up). If things look sad this afternoon, I will be taking off early to ski but I’ll try to catch up on the weekend.

Laggards in the oil patch include RIG, XOM, CVX, COP, PDS, HAL and BJS. Today is not a safe day to trade anything with options coming up but if Valero is rockin’ then these are most likely to follow suit. XOM, CVX and HAL are all being held down by critical option levels and may break sharply up on Monday (assuming no change in the oil crisis).

NEM, ABX and BVN still lag the gold market. NAK is a buy as long as gold stays over $560 and MRB still looks strong.

Some homebuilders are crashing and some aren’t. There is no way I’m going to try to guess which at this point. Fundamentals seem irrelevant at this point.

  • DHI looks very weak but says they are very strong in the conference call so I guess I will hope it hits the 200 dma of $35 but then I will really want to buy.
  • RYL looks strained


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Thursday Wrap-Up

As expected, that was more of a bounce than a rally…

The Nasdaq did get it’s head over 2,300 so tomorrow is super critical but that was a big position to hold, especially with Google and Apple crashing and Yahoo and Intel offering no help at all.

Today it was Osama’s turn to pump up the price of oil. What a coincidence he happened to make his announcement just after a huge build in crude inventories was announced… The fact that oil couldn’t break yesterday’s high on this news shows you just how flooded with oil the markets are.

The gold market was goosed by Bin Laden’s guest appearance and kicked right back to $560. Aren’t you glad I told you to buy ABX this morning – up 4% today thank you very much!

The worst part of today is that, with all the mineral and oil stocks flying up, the rest of the market must have been fairly anemic.

Meanwhile Bush was out giving a rah rah speech about the economy. He said we can fix this deficit by not collecting all those darn taxes.

New home construction bottomed out last month giving most builders a hit today but BZH pulled it out for a 2.5% gain, amazing!

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Google got whacked by additional negative tones from analysts and a recycled story about the Government wanting to check out what porn is being downloaded by who. 25% of Google’s revenues come from porn so this is not a place they really want people poking around.

AMD was down a bit from its $38 open and I think that may be high enough for that stock.

Apple had a really lousy day. Although it recovered 50% from last nights sell off, the late day action was very soft. Usually it takes a few days for them to bounce back but the buyers just weren’t there today.

Yahoo gave up another .85 today – it is taking a lot of restraint for me not to buy this one.

All our gold plays were good today, even NEM had a good day before giving half back. BVN is now lagging the rest. Somehow MRB gained 6% but if you owned it you wouldn’t have thought so from watching today. GG was good for 5% too. My new favorite, NAK had a chart of beauty today gaining 6.5%.

BSX opened up but then…
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Thursday Morning

Well, Japan and Europe are bouncing back but we have to wait and see how our markets react. I am concerned that Japan’s quick rebound will suck global capital into Asia and away from our lackluster markets.

Cash was a great call yesterday as was obeying the Valero rule which told us well in advance that oil prices were going to come down. At this moment (6am) I am still not ready to jump back in until we recover at least Monday’s open, which is quite a ways away.

A strong market makes dramatic recoveries (like the Nikkei today), not little incremental improvements. The same can be said for a strong stock…

The Nasdaq made only a token recovery yesterday and now needs to break back over 2,300 to avoid a confirmed downtrend. 2,250 is the key resistance on the way down – I would have felt better if we had tested it yesterday.

The S&P is in slightly better shape holding above 1,275 for now but it needs to break all the way over 1,300 before anyone will be impressed.

The Dow, having hit 11,000 already, took a nice bounce off its resistance of 10,825 and looks most poised to recover.

Oil pulled back from a market killing number of $67.50 yesterday as profit taking occurred ahead of today’s inventory reports but could easily break back up if we have a draw down.

The oil traders are catching on to my theory that the supply disruptions in various countries and the Iranian’s sudden interest in Nukes may simply be ploys to pump up the prices. That being said, as long as this game goes on prices will remain inflated but very volatile.

Gold is recovering, as expected and ABX looks like it as low as it will get for a long term play.

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Yesterday’s TOTD NVDA was invalidated by the market action – good thing too as it went the wrong way.

AMD had a wildly successful quarter and looks like it really is kicking Intel’s butt this year. Still I think earning $96M a quarter is stretching a $15Bn market cap a little thin.

APPL posted a phenomenal quarter but in this, “sure, but what will you do next?” world we live in, their guidance was conservative and will cost the company today. This is a normal pattern for Apple and the post-earnings drop usually presents a…
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Wednesday Wrap-Up

Not much to say about today.

It went about as well as could be expected given the start it had. This will certainly be a wait and see kind of day.

The close down was not that severe and now we need to see how the world markets look tomorrow.





300 Point Weekly Wrap Up!

Nothing wrong with that week was there?

We have a ton of open calls (although as I said on Thursday, I have sold most of my shorter plays) since everything just kept going up!

Out of 60 picks over the last 2 weeks we have had 3 losers (and I’m doubling down on those oil plays) and 4 neutrals – not a bad percentage. The average gain is close to 100% but that includes the newer picks… Really can’t complain can we?

Last Friday left us about 1% down but we called a bottom over the weekend and yesterday we laughed at the attempted pullback and called for Dow 12,000.

Here we are now, already at just under 11,400. I’m not ready to declare victory yet but we soon may have good reason to celebrate if we can just get the follow through on Monday.

Today’s action was better than I hoped, we got both our consolidation AND a breakout at the close.

The Dow closed at the day’s high at 11,381, a level only seen for 10 days this decade (they were in May) when the Dow peaked at 11,670 before plunging to oblivion on the shock of $75 oil. I have to think that had the oil pumpers not been so greedy, we could have gently eased the price up with the markets and we would all be happily paying $80 a barrel against a bull rally that would put the Asian markets to shame.

The S&P broke 1,300 at the close after brushing against it all afternoon and the NYSE finished just short of 8,400. I said we had a rally when the Nasdaq hits 2,100 and today it had a nice test of 2,140 at the open and went straight up from there to finish 25 points better at 2,163.

For the week, the Nasdaq was up 5.2% vs. 2.5% for the Dow and S&P. For the year, the Nasdaq is still -2% vs 6% Dow gains and 4.3% on the S&P. It’s all up to Nasdaq 2,200 next week!

Even Dell had a nice recovery today. If they can be forgiven, can MRVL be far behind? TOL and all the builders came back from an early sell-off but it was, unfortunately, oil that provided the gas for the markets at the end of the day. The pending Jihad weighs heavily on the markets and something…
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Wednesday Morning

This is almost sickening.

The Nikkei is down another 464 pts (3%) today, this time it was so bad they halted trading! I wish I traded foreign markets because I called the dead top on that one last week…

Not to be depressing but I was going to start this article off by referring to the Hitchhikers Guide’s great cover advice “Don’t Panic” but, looking at the world situation I’m not sure that is good advice today.

If you have been taking my advice and staying in mainly cash, then we can just wait and go bargain hunting later but, if you are still holding positions and the markets are dropping, you may want to take some losses off the table just in case the Nikkei drops another 500 pts tomorrow. The Japanese market lost $300Bn this week, that’s like losing a mid-size country’s whole economy – while it is possible that this will finally start a flow of money back to US equities, I’m not going to hold my breath.

If the market does not climb up from today’s open to close within 1/2% of flat, we will be breaking some major technical levels that will make for a very tough recovery.

It will all come down to earnings and we are off to a rotten start. AAPL should be a bright spot today, even with what are now insane expectations for the stock. EBAY is a wildcard so the most important number of the day will belong to AMD who, hopefully, can demonstrate that Intel’s suffering is due to their success and not due to overall market weakness.

More rebel attacks in Nigeria and the Iranian crisis are keeping oil up despite the fact that Opec is getting so backed up with actual crude that they are talking about cut backs. Fear and fear alone is driving the markets and President Roosevelt said that fear is the one thing we should fear (not exactly his point but it is mine).

A fear driven market is irrational and dangerous and I cannot emphasize enough the advantage of staying in cash at a time like this. Losses in Asia and Europe are so steep that people are cashing in their gold to cover their positions. Money is also flying into treasuries which is inverting the yield curve again.

Speaking of kicking a market when it’s down, Warren Buffet picks today…
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Tuesday Wrap-Up

Not a good day at all. Oil will not give us a break and there is no way the markets can climb on this.

BCRX was the only success of the day although none of our picks went down. As I said, stay in cash and let’s wait to see how things shake out.

Tomorrow is shaping up to be another disaster with INTC disappointing by a lot, and YHOO turning into a major let-down which will devastate web tech tomorrow.

IBM’s earnings were up 13% on 12% lower revenues than expected. I don’t have a big problem with that but I imagine the markets will.

As I said earlier, I still consider Yahoo a buy, earning were still up 36%, just not as much as expected but I think that kind of growth justifies the p/e of 30 this stock will drop to.





Telling Tuesday

This will be a telling day for the markets.

On Friday I said the Nikkei is in for a correction and, as I am so widely read in Japan it seems, the market is dropping close to 500 pts today. This, of course, is panicking the European markets, especially as it is due to the very real catalyst of $65 oil, and we can expect our markets to follow suit, at least in the morning.

The real question is going to be: “Can earnings save us or will they be the stake in our hearts?

I don’t think anything can save us from $65 oil other than a whole year where we prove we can earn money at that price. Q4 earnings were based on a $60 average so little credence will be given to good results – only great results will ease concerns!

Meanwhile, even with all this horror and destruction in the markets, gold pulled back from $560 so it may be correction time again if we can’t breach $560 in US trading today. GG and NEM have been on a real tear and could trade down into options if gold retraces to $555. At $560, BVN and NAK are gold stocks with room to grow.

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NAK is a buy on any pullback stock. They are just getting started on an amazing gold site up in Alaska that will make this company one of the World’s largest producers in years to come. I would consider $5 to be a gift on this stock, I’m not sure if we will get that much pullback and it may get away from us if the mainstream press discovers it. This is a long, long term hold.

On the flip side, NEM is having a bad run of run-ins with environmental groups which may slow a couple of projects. At a p/e of 60, they can’t really afford a misstep so I will be considering a short trade if gold breaks below $555.

AA is the latest company to slam the door on pensions. No new workers will be getting them and we can expect some terms to be renegotiated on the old ones.

Could we really be about to pass the asbestos fund? Friday’s move on OWENQ and GRA suggests so. Owens is probably the greatest value on the market if they can actually get out from under the cloud…
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Weekend Reading

As this is a blog I am exercising my right to randomly throw down my thoughts as I go through some of my readings this weekend so don’t expect any particular point to this article…

Bad Data: Corporate earnings are not up as much as we think. The 12% increase in earnings that has been headlined was inflated by $456Bn in share buybacks, fueled by the 0ne-time repatriation of hundreds of Billions of dollars under yet another tax cut. According to Barron’s, operating earnings were up just 7.8% last year, the smallest gain in three years.

As I said last week, this is not a very good rally – here’s a chart that proves it! http://www.chartoftheday.com/20060113.htm?T What does this mean? Well, we are 800 days into a rally, making it one of the 6 longest in 105 years, yet we have gained only 50%, making it one of the 4 weakest in that same time period.

Big Data week coming up. Earnings from IBM, AAPL, AMD, Intel and several Banks along with the CPI on Wednesday. Wednesday also brings us the Housing Index setting us up for Thursday’s huge builder day with Housing Starts and Building Permits being reported on the same day as earnings from BZH and DHI. Both of these companies have told people things are not bad so look out below if they are!

YHOO has earnings Tuesday and I consider the pullback to $40 to be a potential gift but I will wait until the results are in to buy as good news will move the stock up for days while bad news (or the perception of it) will present a great long-term buying opportunity at around $37.

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It looks like the oil market can’t shake the Iran thing and Brent Crude hit $63 today, that makes $65 almost certain tomorrow. On 12/6 in “Gold Rush” we talked about the macro impact of 6M people per year entering the “middle class” around the world. Mario Gabrlli of Gamco Inverstors goes me a few factors better by discussing the 3Bn people who are in what he calls “takeoff stage.”

You need to think of these people as adolescents just getting their first jobs. Think of what you did with your precious money when you were just entering the work force. While they themselves may not be running out to buy cars, the radios, shoes, watches,…
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Zero Hedge

World Trade War I: US Asks South Korea To Join Anti-Huawei Campaign

Courtesy of ZeroHedge. View original post here.

The bilateral trade war between the US and China is gradually becoming a global trade war of global geopolitical and commercial dominance between the US and Chinese spheres of influence.

Shortly after the two largest mobile phone companies in the UK decided against launching Huawei-built 5G phones this morning, and roughly around the time a bevy of Japanese tech and telecom companies including ARM Holdings, Panasonic and SoftBank all imposed a boycott on supplying Huawei with mission critical components joining Australia, and New Zealand as major US allies to end commercial relat...



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Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations

 

Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr / Shutterstock.com

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...



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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...



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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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:

 

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

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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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