2.4 C
New York
Friday, December 9, 2022

Subscribe

Thrilling Thursday – Romney and the Markets Turn Up

What a debate last night!

One of the candidates will lower taxes for the middle class and small businesses while slamming shut loopholes on the rich and Big Business, limiting their deductions and raising taxes if needed, he will provide national health-care and concentrate on jobs, punishing outsourcers and educating US workers to get them on the path to full employment.  The other candidate is already President.  Romney now claims there will be no 20% tax cut for the rich – I assume his rich backers assume he's lying to get elected (lying doesn't bother them) and President Obama was in no way prepared to debate the guy who showed up yesterday and he lost the debate in an embarrassing fashion.  

From a market perspective, we were playing the weakness as nervousness ahead of the debates and accumulating long positions as planned yesterday.  Oil blew past the $88.50 target I set in yesterday's morning post – all the way to $87.70 before finally bouncing back and hitting our target again overnight (now $88.64).  That drop from $91.22 in the Futures was good for $3,500 per contract in the Futures but, of course, we were done being short, as planned at $88.50 and in fact made a couple of bullish trades – long on USO at $33 (as planned) and short on SCO at $44.  We'll see how they work out today but up at the open is a good sign.  

RUT WEEKLY HPQ was irresistible as it tested $15 (long-term positions) and BBY gave us a good entry again at $17.50.  We made a quick 50% on the TNA weekly $61.50 calls, which we grabbed for $1 in our $25,000 Virtual Portfolio at 10:09 in Member Chat and we caught a nice move up to $1.50 not even 30 minutes later as our 838 line (weak bounce) on the Russell continues to hold.  

Our bullish stance on AAPL finally paid off as the stock went from $660 to $672 at the close – hopefully $680 is next.  Gasoline only got to $2.75 (we were hoping for $2.70) but is back to $2.86 already in pre-market trading (/RB).  

As you can see from Dave Fry's Russell chart, we're still in a bullish consolidation – just below our breakout level and today, so far, we don't have rising Dollar headwinds to hold us back as the Yen hit goal at 78.70 to the Dollar and seems happy enough above 78.50 (the Nikkei gained 1% and is back over 8,850 goal).  

Neither the BOE or the ECB changed their rates today, that's weakening the Dollar (79.70 at 8:40) as we are now engaging in more easing relative to those currencies and the BOJ knows better than to waste their money fighting the tide today but we can expect at least an attempt to support the Dollar at 79.50, which will be 78.50 on the Yen.  Meanwhile, oil is up over $89 again and gold just hit $1,797 and silver is over $35 and that's going to be great for our long silver and gold hedges (see Friday post).  

XLF WEEKLY Spain had a bond auction that went pretty well this morning – selling $5.2Bn of 5-year's at 4.77% and 2-years at 3.28% – a huge improvement over last month so Draghi can take a victory lap this morning.  We have our own Fed Minutes this afternoon (2pm) as well as an update on the Fed's Balance Sheet after the close and a speech from Bullard (hawk) on Monetary Policy at 6:30.  So far, the Fed hawks seem to have drunk the Kool-Aid and are as doveish as the boss so it will be interesting to get Bullard's take but it won't mean much to the markets with Non-Farm Payrolls over-riding all else tomorrow morning.  

Hopefully, today will be the day XLF gets back over $16 (we're long).  You would think backing the banks would be a no-brainer with QInfinity but, so far, we're just not getting anything like the reaction we had to even operation twist last fall, which too XLF from $11 to $15.50 (up 40%).  Granted, QE3 was anticipated and we already ran from $13 to $15.50 but where's my other $2?  It won't be a real rally until the Financials participate.  JPM reports next Friday – we may have to wait for that catalyst to ease the jitters that still surround US Banking….

Responding to a question of whether an ECB rate cut is even conceivable considering the "broken transmission mechanism," Draghi says the ECB's use of non-standard measures (OMT) "speaks for itself." In other words, the bank believes a rate cut will be of little use, so don't expect one.  So the dollar will remain more favored than the euro as the borrowing currency for carry traders…

There's a lot of back and forth action now as Draghi answers questions and we're probably going to be testing our strong bounce lines once again today but I'm not looking for a major breakout without about 150,000 jobs created tomorrow.  In fact, anything over 200,000 is going to make Romney look foolish, despite he fine performance so we'll see just how much pull Obama really has at the BLS because the next debate is just two weeks away and if lack of job growth is off the table – it's going to very hard for Romney to score any points on repealing Obama Care and raising military spending by 30%.

Oh, and the funniest moment from last night's debate – Romney told Jim Lehrer he would fire him and shut down his whole network – now THAT's the Bain-Bastard Romney we all know and love because he said it with a smile too!  

140 COMMENTS

Subscribe
Notify of
140 Comments
Inline Feedbacks
View all comments

According to Bloomberg, FB users spent 314B minutes on Facebook in August alone.  Wow! 

randers1 hoss18
Those tank cars, oil have all but disappeared, what we see is only tar for making asphalt. Buffet will take a huge hit if natural gas takes over coal power plants.

LNKD – exercising options and selling stock by CEO, VPs. 

Since they just reported that they have 1B active users, that translates to over five hours per user per month.

did i miss your fed minutes opinion?

Phil rails
If you watch trains all day you see coal and empty coal cars as fast as they can jam them through and maybe 1 of everything else per day. Most coal is east bound but in Montana, a lot goes west. So much hydro electricity in the north west I wonder if the west coal is loaded on ships to China.

FTR
According to the schedule that Diamond posted yesterday, FTR 2015's come out Oct 15th.

" Intensifying sanctions against the country have sent the Iran's rial into an unprecedented free-fall, causing it to plummet in value by 75 per cent since the start of the year; and, stunningly, almost 60 per cent in the past week alone.….If, as many US officials have publically said, the goal of sanctions are to forcibly coerce Iranians to rise up and overthrow their government, the decimation of the Iranian middle class through the collapse of the economy will have only the opposite effect. The people of Iran will suffer potentially catastrophic harm as Iraqis did a decade earlier, while their state grows increasingly repressive and empowered relative to a poor and destitute population – a natural outcome within a command economy such as Iran's."    http://www.aljazeera.com/indepth/opinion/2012/10/201210373854792889.html
 
As I commented yesterday, this will require a response from Iran's leadership, and their only obvious weapon against international sanctions is to double the price of oil.  I don't know how, but closing the Shatt al Arab is the quickest way.  A couple of explosive-laden suicide boats slamming into tankers would work — and Iran could disavow it as the action of "terrorists."
 
It's not as if the Iranians haven't had time to think about this.  What's the West going to do, bomb Tehran?  The Russians will be delighted with any rise in the price of oil, so running and crying to the U.N. will accomplish zilch.  Armed escorts for tankers?  Not cheap, and for how long?    The opinion piece cited above points out the massive inhmanitry of economic sanctions, which hurt the poorest, those in the least powerful position to influence their governments. Iran will likely mount a two-pronged attack [or defense, as they would see it], citing the inhumanity of sanctions in the forum of the UN, and "standing idly by" as Jihadists spontaneously start blowing up oil tankers.
 
I have no information to support this, beyond one can read in any newspaper, but that Iran, astride the two largest oil-producing regions in the world and arguably in possession of nuclear weapons technology, finds itself impotent and to imainge that the collapse of their economy and currency will elicit no reaction worth mentioning is not a thesis on which I would take a short oil position.

Scottmi, the 250 peg for AMZN is for Oct 20 expiry. Max pain for tomorrow's option expiry based on today's OI would be 255. Guess that suggests AMZN will drop 5 tomorrow. Not an accurate science and works sometimes. Off course, would be great for 25KP if it drops 5 tomorrow 🙁

Pharm……….Whats you current take on SVNT? Thanks

SVNT…dead….dead….dead.  AZN has the drug as they just bought Ardea.

Really close to a breakout – tomorrow's job number will be crucial if we want to punch through the lines or bounce down!

What Doug Short calls the best indicator is still quite bullish:

If it was not for the fact that people are tapped out and the real estate market is in the dump, it would be a great time to buy:

f3270ed6a026c9315065e25c862564df Thursday links:  the wrong reason

Refinancing is also a way to put more money in people's pocket but they seem to require actual income and more paperwork these days!

A good comparison of CMG against the competition – lots of different charts at the link:

http://ycharts.com/analysis/story/is_einhorn_right_are_chipotle_burritos_too_pricey

CMG PE Ratio Chart

At this place, it could be that everything’s a bit pricey.

Josh is  no big fan if HPQ:

http://www.thereformedbroker.com/2012/10/04/repsect-the-technicals-how-to-avoid-the-next-hewlett-packard/

 

I have no respect for any market participant who cannot accept that there is value to be had from considering aspects of other disciplines when making investments and trades. I spent the first seven years of my career blowing myself up in so-called "cheap" stocks with "good" fundamentals and "smart" management teams. Often, I had a great company but no risk management and a poorly timed buy or sell. it wasn't until I began incorporating technical analysis that I started to really feel like I was making progress as an investor.

They say "Fundamentals tell you what to buy, Technicals tell you when to buy it."  I like that, even if it may be oversimplified.  In the case of Hewlett-Packard, the fundamentals and valuation have trapped millions of investors. If only they'd respected the money-flow and supply/demand picture of the stock, they'd have saved themselves billions of dollars and a ton of embarrassment. […]

But those who pay attention to both fundamentals and technicals probably missed the horror show of HPQ, despite its status as a "good" company and a "blue chip" stock. In the below screenshot, the downtrend in HPQ is so obvious that a child could be taught to spot it with a 30 minute classroom lesson. Funamental analysts would be doing themselves a huge favor by incorporating some of this stuff while they still have a solvent firm client left.

There is always a risk when you are looking for cheap value!

iPad access,
Not sure if anyone else is facing this issue. I'm unable to access any content on this site after 8:45 am on my iPad. The entire comment list appears fine on my Windows 7 laptop. And I'm trying to access the site now (7:30 pm EDT) on both devices. Using Chrome browser on both. Have upgraded to ios 6 on the iPad a few days back.

Nicarauga
Anyone want to invest in a Modern Balinese style Yoga retreat with me down in Nicaragua?  I'm going to build it on some ocean front property I picked up.  It's awesome that it's cheap to build 90/sqft but it's all cash up front…….  I'm thinking that we'll invest around 500K.  

burrben: yoga
Once established let me know how the LULU sales are going down there 😉

HPQ
Another (negative) take in the video.
http://www.t3live.com/articles/market-analysis/3539-wedge-pattern-continues-to-build.html
As a side note, watching the Morning Call videos and the videos after the close are really helpful to me, to establish Tier1 stocks to trade, and what to stay away from.

burrben,
 
do you live down in nicaragua full time or are you planning part time…….? 
are you familiar with rancho santana……..are you close to the property………
ive read about some innovation city thing they are doing ………….are you involved with that………
tks

Daniel Gross is being optimistic about the job numbers:

http://www.thedailybeast.com/articles/2012/10/04/friday-s-jobs-report-the-most-important-ever.html

That said, the trends in September would seem to point toward a positive number, if not a hugely impressive one. First-time unemployment claims were generally down for the month. On Wednesday, ADP, the payroll-processing company that produces its own estimate of jobs growth each month, said the private sector added 162,000 positions in September – a solid number. And as the blogger/investor/columnist/analyst Barry Ritholtz points out, federal tax withholdings on wages have been growing strongly in recent months. The flow of data would seem to point to continued jobs growth. If I had to go out on a limb, I’d project that September’s jobs report will show a more-than-decent gain – of up to 200,000. (If this prediction comes true, I’ll tell you about the super-secret source I relied on. If it falters, I’ll tell you who to blame.)

You know, I didn't watch the debate last night because I can't stand watching that stuff, but when I see the clips from last night; my completely uneducated guess is that somehow he got an overdose of the beta-blockers (like propranolol) that a lot of the politicians are rumored to take before giving big speeches to quell the symptoms of stage fright. I've seen it in action and it can make one sluggish and slow.  Maybe he was given too much for the altitude.  I'm willing to bet a lot of money that he won't seem anything like that at the next debate.

Jobs numbers…both Lee Adler of WSE and Charles Biderman of Trim Tabs expect a beat…..this will be that 'last let up' to SPX 1500-1550 that is needed…before the great fall of 2013…if it is horrible, then the dark side has begun and I wanna go back……

As for Vegas….well, drinks are on me…pre-party b'f dinner, although I will not be attending dinner…I owe everyone for LLY… 🙂

rdn – Interesting take on the beta blockers.  No way it was just "the altitude", as rumored — my house in Utah sits at 8,600 ft., I had only been there for four days [little acclimatization] and my experience is that low oxygen is harder on your muscles and lungs than on your brain, until you get above 15-20k.  Obama didn't appear torpid, just unprepared.  It might have been drugs, but my money would be on hubris.  Confidence and natural glibness will seldom overcome the Six P Principle — Proper Preparation Prevents Piss Poor Performance.  Obama had the deer-in-the-headlights look of someone who took a knife to a gunfight.  

Best tweet of the debate: "This campaign to re-elect Bill Clinton is going really well."

LOL I just googled "beta blockers" and "altitude" and came up with a study where they tested the effects of beta-blockers on "elderly" mountain climbers and found adverse effects on performance- "elderly" being defined as over 35 years old!  And here I was just finally getting resigned to being Middle Aged…

Oil bouncing of yesterday R1/ long off 90.75

Phil/PCLN Example
Your example illustrates the point your are making but unless you make your DD decisions correctly, it can still blow up in your face?   Having bought PCLN at $635, when do you know to DD?  If you can't predict the future, you might be tempted to DD when the stock is down 30%, then again at another 30%.  At this point with PCLN at $311, if you had the guts to DD again, you'd still get killed as it dropped to $150.  I know it is all about patience and your strategy is WAY better than buy and hold, but there are still more ways to get burned on a bad trade due to bad decisions….or good decisions made early or late!   To me the biggest lessons I've learned from you are conservative position size and patience (I'm making progress on the first but the second is a REAL challenge for me).

Oil Lines today Lionel:

R3 – 96.64
R2 – 94.24
R1 – 92.82
PP – 90.42
S1 – 89
S2 – 86.60
S3 – 85.15

Yesterday's high and low – 91.84 / 88.02. I also have a Fib line at 91.02.

Maybe some of you have used this, but I was trying to find a place where historical P/E could be easily displayed. There are many more metrics that can be charted. Select the Data Tab and then click on the box "View over 70 metrics" and choose the one you want, P/E in this case.

Stjeanluc/ Good morning and thank you.
Let see if we can go through the Fib line today…

Rejected…

Good Morning—wow

Stay Connected

159,561FansLike
407,537FollowersFollow
2,150SubscribersSubscribe

Latest Articles

140
0
Would love your thoughts, please comment.x
()
x