Trading

• Inflation Is Worse Than We Think- Inflation Is Worse Than We Think John Tamny 07.16.08, 11:45 AM ET Forbes   When inflation is presently considered, those who possess a more sanguine outlook about pricing pressures have pointed to the Consumer Price Index to bolster their view that inflation is not a problem. While the dollar has fallen to record lows versus gold and [...]
• How GOOG Ended the Week and the Fall-out- Google Inc (GOOG) missed earnings this week and plunged almost 10% by week’s end.  Let’s look at the daily and weekly chart briefly to see if we can find any clues for potential price action in the future. Google Daily: With the failed earnings expectations, Google stock - proving once again why it is known as an [...]
• 95 Stocks Returning 12%+ this Week- Well unlike the past month when we had a dearth of names, and had to bring our % gain threshold down to 7%, we have a bevy of winners this week. Pretty much everything that suffered the most the past 6 weeks enjoyed their dead cat bounces this week. Obviously since we don't own much of this "merchandise", we did not partake much in the festivities this week - mostly it was our minor "barbell" positions (stocks we don't really like but own for periods like this). It was a George Costanza week - own the opposite of what you normally would want to own.
  
  Criteria
• Mechel (MTL) Profits Appear to be Coming Under Scrutiny- Ah, the joys of investing in non capitalist societies. It appears there is a movement afoot in mother Russia as Mechel (MTL) seems to be printing too much money. In-country steel makers (Mechel's peers) are getting the short end of the stick and the government wants to fix that. Just replace the term "steel makers" with "financials" and you can see the United States is not very different from Russia. ;) Only Russia dresses up the actions in much more flamboyant ways.
  
  An interesting story out this week below, certainly could go a long way in explaining the weakness of late - although all the metal companies have been mugged of late.
• 10 Questions With Greenbackers.com- TIMalerts isn’t the only newsletter that focuses on low priced stocks…I’ve been following Greenbackers.com on and off for several years…check out this interview I did with their founder, Mark Chacon: Greenbackers has been around for 9 years, but became somewhat dormant from 2004 to 2007 due in part to owning/managing a retail outlet and land. During that [...]
• Alert HQ for the week ending 7-18-2008- This post is to announce that the latest list of stock alerts is up and available at Alert HQ. Each week we scan over 7200 stocks and ETFs looking for fresh BUY and SELL signals.
  
  Stocks staged a strong rally this week led by financials of all things! All the major indexes showed respectable gains as earnings season is turning out to be decent despite some mixed results in the Tech sector.
  
  Oil dropped a significant amount this week and that accelerated the rotation we had seen from energy stocks to other sectors and provided another big boost to the stock market.
  
  As a result of all these positive feelings running rampant through the markets, we have a big change in what we are seeing in the TradeRadar daily signals. For the first time in weeks we have more BUY signals than SELL signals. We actually have 65 BUY signals and only 31 SELL signals based on daily data. Unfortunately, the signals based on weekly have not been so quick to turn around. We have only 7 BUY signals and 22 SELL signals based on weekly data.
  
• Trading Fear and Greed in FX-

  fx weekly

• Confirmed Bear Market Rally Underway- This week finally gave traders the ‘bounce’ they were anticipating, in terms of an overdue “oversold” technical rally.  Let’s look at this development and try to make some price projections on what might happen next. First, the Dow Jones Daily Chart: I think initially, my first thoughts are that short-sellers are covering en masse which helped ignite [...]
• July 18, 2008 Mid-Day Metals Review-

  iraepsteinfutures Ira Epstein and Company Futures Trading, Online Trading, Technical Analysis, Metals Review, Sales: 800-284-3010

• Bookkeeping: Restarting Kinross Gold (KGC) Position- Since I am not sure what exactly the market will "hate" next week or in the weeks to come; it seems to change by the day; I want to build up 'protection' (hedging) another way, and we'll use gold. Gold is more of a sentiment indicator than anything to do with fundamentals. During this market rebound the Gold ETF (GLD) has not really fallen much - that is not a good sign. Remember, gold is the ultimate Armaggedon trade and in the past an inflation hedge (although it appears black gold has taken that mantle since last fall). So with the "all clear" signal once again launched by CNBC ("it's all priced in") it seems curious that gold is not correcting. Frankly with all the paper money being printed off (and or proposed) along with my assumption of yet another stealing of your grandchildren's future (i.e.
• Wilbur Ross Believes M&A Activity in Coal Will be Unprecedented in Next 12 Months- First, thanks for a reader for highlighting this story.
  
  Second, I always like when smart people who have made a lot of money agree with my thesis that aside from being great secular growth stories, that any day one can wake up and find your coal stock a target of acquisition.
  
  Third, the stock prices in the short run have very little to do with the long run. I continue to stand by these names as the hedge funds tell us the world is slowing (gosh I was on that beat 9 months ago, glad they finally caught on) and its time to buy Citigroup (C). Oh and by the way, the world was not slowing 4 weeks ago when these stocks were the apple of everyone's eye. It just slowed about 2 weeks ago. Sure.
• Mechel (MTL) Stock Still in World of Hurt- Mechel (MTL) has hit my "target" of $40 to add more, but it is close enough now to the 200 day moving average ($38) that I'd prefer to wait and see if we can get that price. It has been an interesting exercise of late in the metals space - first goes Vale (RIO) now goes Mechel (MTL). Interestingly the market is assuming both are on the hunt for acquisitions. We are in the upper $39s now and this remains one of my favorites ideas - so I'd love to build it up at $38. It is amazing to see these forward multiples compress.
• Bookkeeping: Closing Both Indian Banks- I have been waiting for some sort of financial bounce to close out both the Indian banks - unfortunately we have given a lot of unrealized profits away in this "death to buy and hold" market, but despite these gosh awful charts we have been able to sock away $2500 in gains in ICICI Bank (IBN) and $1100 in HDFC Bank (HDB). Obviously profits were far higher say 60-90 days ago. The former has bounced from $21 to $30 (+42%), and the latter $61 to $76 (+25%) in the past week so it's a better time to sell than in the panic. Why Indian banks are selling off as bad or worse than their US counterparts is beyond me but that's the market logic.
  
• Bookkeeping: Layering Out of some Mercadolibre (MELI) and Ciena (CIEN)- Just raising a bit of cash on some bounces in the technology group - this market appears quite directionless and after our cursory oversold bounce the direction from here has no clear trend. Monday and Friday "they" liked commodities", Tuesday - Thursday "they" hate them. And vice versa for other things. Rudderless action. I was hoping for more of a sustained bounce into which I could build some short exposure but so far it's been relatively pathetic. Again, until the S&P crosses back over 1275 I consider this to be nothing more than white noise.
  
• Did I Mention Healthcare is Safe? Gilead Sciences (GILD) Down 9% on Earnings- Another "safe" sector - healthcare... here you can lose 9% instead of 12% elsewhere aka "it's safe" ;)
  
  Gilead Sciences (GILD) breaks down below its 50 day moving average this AM, on a 9% drop. Did I mention earnings season is a complete mine field? Even in the punditry's "safe havens". 200 day moving average is in the low $48s which might make it interesting so I can have exposure to such "safety".
  
• My Soon-To-Be Legendary-Cuz-It’s-Dead-On AMEX Black Card Interview- I’ve teased my recent interview about the AMEX Black Card in a few blog posts, but due to overwhelming demand and critical acclaim, I gotta post some of it below so that those who are too lazy to click links can see what all the hype is about… These are just a few select questions-and-answers, see [...]
• July 18, 2008 Mid-Day Stock Indexes Review-

  iraepsteinfutures Ira Epstein and Company Futures Trading, Online Trading, Technical Analysis, Stock Indexes Review, Sales: 800-284-3010

• Will Your Starbucks be Closing? See Full List Here.- If you’ve become dependent on that morning cup o’ Joe from your favorite local Starbucks, you might want to check out this list published by USA Today which lists every single Starbucks (SBUX) store (600 of them) that will be closing soon. USA Today Article Link to PDF File of all 600 Starbucks Store Closings If you [...]
• IG Index Daily Market Update 18/07/08-

  IG Index Daily Market Update 18/07/08

• SKF - UltraShort Financials: A Lesson in Defense and Stops- I sincerely hope you weren’t majorly short the Financial sector the last few days - if so, I hope your stops took you out before carnal and potentially devastating damage was done to your account.  Let’s look at what went wrong (and right) so quickly. Let’s assume you heard the news of how Financial stocks were [...]
• FOREX Technical Analysis-

  EUR/USD trading suggestion for the 18th of July, 2008

• Does change in ProShares BUY signals indicate sector rotation?- Sometimes it is as instructive to see what sectors are out of favor as it is to see what sectors are in favor.
  
  Recently we posted a list of the strongest BUY and SELL signals found in the family of ProShares ETFs. This earlier post found mostly inverse ETFs generating the strongest BUY signals. This was interpreted as a display of a very negative outlook on the stock market as nearly every sector was represented.
  
  The following list shows those ETFs which, over the last two weeks, have fallen off the earlier list of strong BUY signals
  
• 130. A Trader's Introduction to the Australian Dollar-

  A look at what forex traders need to know about the currency of Australia, the Australian Dollar.

• 129. A Trader's Introduction to the Canadian Dollar-

  http://www.informedtrades.com/ An introduction to the Canadian dollar, the factors that impact its value, and what forex traders should bear in mind.

• Bookkeeping: A Few Energy Purchases- This is quite a traumatic selloff, but once these momentum trades reverse, a lot of rats want to get off the same ship through a very narrow door. I said I would not believe this is a bottom until THE strongest sector (natural gas) got hit, and it appears I'm getting my (ahem) wish. I'm going to being placing some orders into the panic, into 2 service names and one natural gas name we began yesterday.
  
• The Death of Natural Gas?- Yes the story is over!
  
  Or at least until the United States Natural Gas Fund (UNG) hits $47 (200 day moving average)
  
  p.s. the Haynesville 4 are finally breaking down to more attractive prices. But still too early to get in there wholesale because hedge funds have decided the story is over. So it is. Until they change their mind. (I wonder what Benjamin Graham would think of this new fangled "investing" that dominates the markets nowadays)
  
• Always a Silver Lining - US Stock Market Outperforming Pakistan- This type of story is why you must read UK papers :) Not a peep of this stateside.
  
  Pakistani Investors Riot Over Falling Shares Prices
• Confirmatory Bias and Oil Investing - Part Two- I recently came across a post on the Victor Niederhoffer Blog about the concept of Confirmatory Bias. I shall reprint the standard quote from Sir Francis Bacon that is used in much of the literature on this subject:
  
  "The human understanding when it has once adopted an opinion (either as being the received opinion or as being agreeable to itself) draws all things else to support and agree with it. And though there be a greater number and weight of instances to be found on the other side, yet these it either neglects and despises, or else by some distinction sets aside and rejects; in order that by this great and pernicious predetermination the authority of its former conclusions may remain inviolate..."
  
  After searching further, I came across a paper published in the Review of General Psychology in 1998 authored by Raymond S. Nickerson of Tufts University. I believe that the concepts he discusses have applicability to current beliefs by bullish energy investors in the oil market.
  
• July 17, 2008 Mid-Day Metals Review-

  iraepsteinfutures Ira Epstein and Company Futures Trading, Online Trading, Technical Analysis, Metals Review, Sales: 800-284-3010

• July 17, 2008 Mid-Day Stock Indexes Review-

  iraepsteinfutures Ira Epstein and Company Futures Trading, Online Trading, Technical Analysis, Stock Indexes Review, Sales: 800-284-3010

• Bookkeeping: Selling Down some Homebuilder Exposure- We decided on the last rally in April/May that before the "next" correction (which did not take too long to surface) we were going to adopt a bit more of a barbell approach. That meant buying at least a few of the sectors we don't like, for times just like this - when financials, homebuilders, and retail is jumping. This way we have something working at all times. Frankly on a day like yesterday, if we had the type of positioning we had in January and March (full fledged "global growth" stories while remaining hedged against financials and real estate) we'd of shown one of those days as we had in Jan/Mar where the market was up 2.5% and we were down 2%. But with this adjustment we actually outperformed the market yesterday even when almost half our positions were red to flattish. It helps when Ultra Financial (UYG) goes up 23% in 1 day.
  
• Canpotex to Sell Potash @ $1000/Ton and Silvinet Sinkhole Strikes Again!- Another very busy day....
  
  Lost in yesterday's excitement was news that Canpotex (remember - that is an alliance of Potash (POT), Mosaic (MOS), and Agrium (AGU)) has raised spot prices for some Asian buyers to $1000/tonne. The Russians have joined as well.
  
  Notice a trend I hope?
  [Mar 27: Canpotex Potash Contracts Secured with India @ $625]
  [Apr 2: Potash Makers Already Talking $750, up from $625]
  [Apr 16: Chinese Agree to $576 Price Point for Potash]
• IG Index Daily Market Update 17/07/08-

  IG Index Daily Market Update 17/07/08

• Eating My Words…- One month ago, in reference to Inbev’s offer for Anheuser Busch, I wrote (see Ambush by Inbev?): …no way, ain’t gonna happen. It was my opinion that the proposed takeover of Anheuser by Inbev would not be a successful one. I had several reasons for such a view. First, I thought that the deal involved far too [...]
• Trading Wednesday’s Trend Day- How might we have identified and taken advantage of today’s developing trend structure?  Let’s take a couple of perspectives. First, we, along with many other traders, have been expecting some sort of ‘oversold technical bounce,’ meaning odds were increasing for some sort of ’snap-back’ rally, similar to the visual concept of a rubber band being stretched.  [...]
• More trouble in store for OmniVision?- OmniVision (OVTI) is a California semiconductor company that makes solid state image sensor devices, or camera chips, for cell phones and other consumer products. Though design is carried out in the United States, chip fabrication occurs in Taiwan.
  
  DigiTimes has reported news of "CMOS image sensor supplier OmniVision planning on reducing its order volumes to Taiwan Semiconductor Manufacturing Company (TSMC) in the third quarter". Instead of increasing orders by 10% it will reduce orders by 10%.
  
  A weakening in the handset market is said to be the cause of the reduction in orders. OmniVision apparently increased inventory too rapidly based on overly optimistic expectations for cell phone orders.
  
  This comes after the company disappointed investors last quarter, missing analyst expectations for both sales and earnings. In the company's fiscal fourth quarter ending in April, sales fell 25%. EPS came in at $0.27, shy of analyst estimates of $0.32. The stock has fallen from over $19 in April to under $12 today.
  
• FOREX Technical Analysis-

  EUR/USD pair overview for the 17th of July, 2008

• Massive Earnings Thursday- It appears that the pattern for the next few weeks is light earnings periods on Mondays, nearly non existent Fridays (except this week) and jam packed Tuesdays-Thursdays, especially the Thursdays.
  
• July 16, 2008 Mid-Day Metals Review-

  iraepsteinfutures Ira Epstein and Company Futures Trading, Online Trading, Technical Analysis, Metals Review, Sales: 800-284-3010

• July 16, 2008 Mid-Day Stock Indexes Review-

  iraepsteinfutures Ira Epstein and Company Futures Trading, Online Trading, Technical Analysis, Stock Indexes Review, Sales: 800-284-3010

• Confirmatory Bias and Oil Investing - Part One- I recently came across a post on the Victor Niederhoffer Blog about the concept of Confirmatory Bias. I shall reprint the standard quote from Sir Francis Bacon that is used in much of the literature on this subject:
  
  "The human understanding when it has once adopted an opinion (either as being the received opinion or as being agreeable to itself) draws all things else to support and agree with it. And though there be a greater number and weight of instances to be found on the other side, yet these it either neglects and despises, or else by some distinction sets aside and rejects; in order that by this great and pernicious predetermination the authority of its former conclusions may remain inviolate..."
  
  After searching further, I came across a paper published in the Review of General Psychology in 1998 authored by Raymond S. Nickerson of Tufts University. I believe that the concepts he discusses have applicability to current beliefs by bullish energy investors about Oil.
  
• Apple’s AAPL Latest Actions- What has Apple Inc (AAPL) been up to in terms of price action lately?  Are we coming up on a fresh buy signal? Let’s look closer. Apple Weekly: Price has formed a lower swing high, but has pulled back and held up (especially given a drastic June and July in the broader indexes) in terms of relative strength [...]
• Oil Stocks Fall ahead of Oil Prices- In classic nature, oil stocks led the recent oil price decline, further giving clues that oil prices were in for a correction of some sorts.  Let’s take a look at Exxon-Mobil (XOM) and Chevron Corp (CVX) and the recent price of Crude Oil Exxon-Mobil (XOM): XOM peaked at $95 per share (closing price) in early May with [...]
• Bookkeeping: New Stake in Natural Gas player Goodrich Petroleum (GDP)- I've built quite a basket of natural gas stocks; unlike coal or fertilizer where I can really break down the industry and pick specific favorites (and there is a limited roster of candidates), there are many many many public natural gas companies. I won't profess to being an industry expert and knowing which of these 50-60 companies is the "true undiscovered value" like I could do in coal or fertilizer. So instead of building large positions in any 1 or 2, I'm spreading my net over a larger pool of fish here.
  
• Bookkeeping: More Nat Gas Buys- Purely on technical reasons
  
  1. Adding to EOG Resources (EOG) which has now fallen from $134 to $106 in under 2 weeks, now sits at its 200 day moving average. Taking it up from 0.9% stake to 1.7%.
     
  2. Encore Acquisition (EAC) is showing some nice relative strength and refusing to sell off below the 50 day moving average of just over $64. Doesn't mean it won't, if the sector continues to break down - but so far it has not. So adding some here in the $65s and pushing it up from a 1.3% stake to 1.7%. As always, buying a stock like this near a moving average involves risk - the stock could break down further and the 200 day moving average for EAC is way down at $46. So no guarantees this level holds. EOG Resources is a great example of what happens once a key moving average breaks.
  3. Bookkeeping: LDK Solar (LDK) v Alpha Natural Resources (ANR)- Alpha Natural Resources (ANR) has retreated a good 15 points since this AM's piece, while Cleveland Cliffs (CLF) has held up (bounced actually a bit) from where I bought it.
  4. WSJ: The History of Bailouts- Readers, if you find any happy or at least neutral economic stories please email me and I'll be happy to post one. While I take satisfaction intellectually that just about all my predictions are playing out one by one, I'd like to post something happy every so often about the economy - I've been searching high and low and aside from the boom in the yacht owners it is hard to find one. ;)
     
  5. Bookeeping: Out Homex (HXM) In Cleveland Cliffs (CLF)- I need to raise cash since I want to buy more Cleveland Cliffs (CLF) on this 10% drop - so I can either (a) liquidate some short exposure or (b) shuffle some exposure from 1 bucket to another on the long side.
     
  6. United Technologies (UTX) Dividend Analysis- United Technologies Corporation provides technology products and services to the building systems and aerospace industries worldwide. The company's segments include Otis, Carrier, UTC Fire and Security, Pratt and Whitney, Hamilton Sundstrand and Sikorsky.
     
     
     UTX is a dividend achiever as well as a component of the S&P 500 and Dow Jones Industrials indexes. It has been increasing its dividends for the past 14 consecutive years. From 1998 up until 2007 this dividend growth stock has delivered an annual average total return of 17.20 % to its shareholders.

     
     
  7. IG Index Daily Market Update 16/07/08-

     IG Index Daily Market Update 16/07/08

  8. S&P Financial Sector Monthly Charts- With the talk of the Financial Crisis getting more attention in the media, let’s look at the long-term chart of the S&P Financial Sector and the XLF (AMEX Sector SPDR). S&P Financial Monthly Index: XLF ETF: What we’re seeing is a massive collapse in share prices and trend.  Price has now made new monthly lows (remember the month [...]
  9. Why is large cap value underperforming?- Today I did a comparison of value versus growth funds using the ProShares family of ETFs. ProShares provides a selection of Ultra-long ETFs as follows:
     
     
     Ultra Russell 1000 Value (UVG)
     Ultra Russell 1000 Growth (UKF)
     Ultra Russell MidCap Value (UVU)
     Ultra Russell MidCap Growth (UKW)
     Ultra Russell 2000 Value (UVT)
     Ultra Russell 2000 Growth (UKK)
     
     They also provide a selection of Ultra Short ETFs as follows:
     
     
     UltraShort Russell 1000 Value (SJF)
     UltraShort Russell 1000 Growth (SFK)
     UltraShort Russell MidCap Value (SJL)
  10. FOREX Technical Analysis-

      EUR/USD pair overview for the 16th of July, 2008

  11. Bill Ackman Offers a Solution to the Fannie/Freddie Mess- This is the problem with our system - the truly greatest minds are going to areas where they can of course derive the greatest wealth. And the best glad handlers go to Washington D.C. and are way over their head with situations such as this - now today (once again, America the reactive) we are hearing about solutions from D.C.. Thankfully Mr Ackman was kind enough to share his plan for a grand fix of Fannie/Freddie (without sacrificing all our paychecks) with people in leadership - as this level of creativity is beyond their pay grade. Ironically, Ackman went short these 2 names (teaching us it is never too late to short dogs) last Thursday so he still made his coin. Which he needs to considering this roster of long positions (ouch). But he is more of a long term value guy, so maybe in the end he'll be proven correctly.
      
  12. Jim Bunning Joins my Hall of Congressional Heroes- I believe that doubles my Hall of Heroes (Ron Paul & Bunning). Mish over on his blog posted the prepared statement from Jim Bunning (R-Kentucky), that I must reprint in their entirety. 2 Congress people down, another 400 odd lot to go. I don't know Bunning's history so maybe there is some ulterior reason and/or he was asleep at the wheel and looked past the same things himself, but at least said some things publicly that most won't - so for that I have to give credit and with the Hall of Congressional Heroes almost completely empty, there is a very low bar to enter. ;)
  13. July 15, 2008 Mid-Day Stock Indexes Review-

      iraepsteinfutures Ira Epstein and Company Futures Trading, Online Trading, Technical Analysis, Stock Indexes Review, Sales: 800-284-3010

  14. July 15, 2008 Mid-Day Metals Review-

      iraepsteinfutures Ira Epstein and Company Futures Trading, Online Trading, Technical Analysis, Metals Review, Sales: 800-284-3010

  15. Will the SEC End the Short Sale Party?- I just saw this headline in the Wall Street Journal a few minutes ago:
      
      "WASHINGTON--The Securities and Exchange Commission announced an emergency action aimed at reducing short-selling that targets Wall Street brokerage firms as well as Fannie Mae and Freddie Mac, and will immediately begin considering new rules to extend new requirements to the rest of the market."
      
      Not only will it involve selling short FRE and FNM, but according to the journal, it will also apply to Lehman Brothers (LEH) , Goldman Sachs (GS), Merrill Lynch (MER) and Morgan Stanley (MS).
      
      I tried to find this emergency order on the SEC web site, but could not. Please send a link my way if anyone can find it.
  16. Mosaic (MOS) Sells Nitrogen Plant to Yara International (YARIY) for $1.6 Billion- For long time readers of the blog you know the reasons we love fertilizer [Oct 23: Analysts Stull Doubting the Fertilizer Stocks] and especially the potash (high moat) and phosphate makers (quite high moat) the best. Mosaic (MOS) has been our top holding and winner for much of the life of the fund. [Top Fund Winners and Losers] We don't like nitrogen quite as much simply because in due time anything China can produce, they will overproduce - and unlike potash and phosphates which have some extreme limitations on inputs/sources, nitrogen is more of a chemical process that China can (eventually) reproduce in great quantities - although input costs are rising there too. That is not to say that the greater trends that we like in all the fertilizer names won't benefit the nitrogen makers as well - it is just a 'relative' game. We want the best boat(s) in the rising tide for the long run.
      
  17. Might Have to Start Taking Evergreen Solar (ESLR) Seriously - Another Huge Contract- Evergreen Solar (ESLR)</span> has the distinction of being one of the oldest publicly traded solar companies, and also the one that has been unable to turn a profit. This one has been around so long it was around near the end of the last bubble (NASDAQ) destruction. But perhaps like Energy Conversion Devices (ENER) - this "hope" stock has finally turned the corner. At the least I have to start taking it seriously. Today's $1.2 Billion contract along with a $600M set of orders announced last month brings them nearly $2 Billion of new business, and a backlog now at nearly $3 billion.
  18. Do You Trust this Reversal?- This is about the 5"SPELLING_ERROR_0">th significant reversal on the way down during this month and a half correction. In the old days these reversals used to be bought because you could trust them. Dramatic drops, followed by indiscriminate selling, followed by a bounce - that's a screaming buy in the old (non socialized) market. Now, you just wonder whose hand is doing the buying. Each reversal previous to this has failed and slaughtered bulls playing by the old handbook in the process.
      
      Perhaps when the market gives up buying the reversals - that will mark the real reversal. That would be fitting.
      
      The worse this never ending selloff gets, the more dramatic the dead cat bounce is going to be. We are "so oversold" but those have been the most dangerous words to anyone with capital on the long side for weeks on end.
      
  19. Bookkeeping: Transactions- Since we've cut back our cash to nil since late last week, and I don't want to lighten my short exposure at this point (unless this is "the" bounce), I'm doing some redistribution. Along with this morning's sale of Core Laboratories (CLB), I've sold 100 of 125 shares of DryShips (DRYS), as it flat lines here in no man's land. I'd like to be a buyer of this name north of resistance (low $80s) or on a return trip to $60s (current $76). Frankly if not for the (future) deep sea rig business DRYS has I'd probably just close this position out and focus on the items the shippers are transporting rather than the shippers themselves. That has generally served us well. And probably I'm "way too early" to give DryShips any valuation benefit for the rig business... I'll have to think about this one a bit further.
      
  20. More Historic Actions (Potentially) by the Fed- Yawn. This is getting so old. Any problem in America.... Print more money, and hand out corporate welfare. Did anyone not see this coming? Oh well, the market reversed temporarily on the joyous sounds of helicopters in the distance. I haven't brought out this picture in months - I've missed it. I continue to laugh in the face of "strong dollar" proponents. Everything we do is a destruction of those current greenbacks in your pocket.
  21. Reviewing December 2007's Roadmap & Views- Every so often I like to build a roadmap of thoughts - generally geared to a 6-9 months outlook on the economy as a whole. This is actually a good check for me because it forces me to consistently update my thoughts and create very broad thesis that I want to have a lot of belief in before I present them to readers. It also serves as a good historical data point so as readers come to the blog later in it's life they can see we have not just been throwing random darts and getting lucky but there has been a whole framework behind our success. I pride myself on taking a top down view of both the economy and specific sectors, in terms of positioning the portfolio and expectations for the market as a whole. So far so good.
      
  22. Regional Banks Crushed- I was (semi) joking in last week's piece about "Whose Bottom Will It Be?" - that after this round of bailouts we'll rally and then we'll repeat this whole process in a few months and the next bottom would be the Merrill Lynch (MER)/Washington Mutual (WM) "bottom". Apparently, I won't have to wait that long. WaMu, America's largest S&L if my memory serves, is down 26% and now trades in the $3s. Might as well be the kiss of death once you are under $5. A couple of other major regional banks National City Corp (NCC) down 26% to $3.30, Zions Bancorp (ZION) down 20%, and Sovereign Bankcorp (SOV) down 14% to low $6s.
      
  23. Markets Lunge for 50% Monthly Fib Retracement- If you’ve been caught in the day-to-day activities of your trading, take a moment now and look at the larger picture of the primary (or broader) trend of the major US Stock Market Indexes - the S&P 500 chart looks eerily similar to the beginning of the 2000-2001 decline.  Let’s look quickly at the Fibonacci [...]
  24. Bookkeeping: Closing Core Laboratories (CLB)- Core Laboratories (CLB) has been an excellent stock for us but after reviewing the various P/E ratios within the oil services, and adding a lot of new positions elsewhere the past month I want to continue to keep the long portion of the portfolio streamlined, and hence chose this as a candidate to sell. I have nothing but love for this company, simply a quiet oil service name that executes quarter after quarter and almost no one talks about; even I almost never type about it. It simply sits in a 0.5% to 1.5% type of holding and performs. But as the market continues to devolve into the abyss we have some other opportunities being created with more potential upside and I want to focus on those names.
  25. That's More Like It- Now this is the fear I said a few weeks ago we need - totally indiscreminite selling.
      
      I am using 2 proxies - Google (GOOG) and the S&P 500. When the former fills its gap (remember I said it was an excellent short in the $540s range) at $460, or the S&P 500 falls to 1170 we'll deploy more to the long side. S&P 1200 will be a psychological level that should provide some interim support but it's just one of those "round numbers" that doesn't mean much in reality. S&P 1170 takes us back to October 2005 levels; and kills off nearly 3 years of gains for all those index fund fans. I'm remaining patient so I have some cash to deploy once the turn really happens - keeping the lessons of January 2008 in mind. We have about 14% short exposure (I added a bit on that nonsense spike yesterday morning) - I'll liquidate that and start to turn more long once we start to see those washouts named above.
      
  26. IG Index Daily Market Update 15/07/08-

      IG Index Daily Market Update 15/07/08

  27. Quick Intraday Structure Overview- Monday’s trading was surprising both to bulls and bears - opening with a large overnight gap which was quickly faded, and price closed near the lows of the day.  Let’s look at the structure and possible trading opportunities that presented themselves. DIA 5-min chart: With price opening with an overnight (over-weekend) gap, odds are favorable that the [...]
  28. Part 2 - Time to get conservative with your 401K- Back in January when the market was going through its first set of gyrations and hitting a serious low I wrote a post titled "Time to get conservative with your 401K".
      
      In that post I suggested that, in the interest of preserving capital, it might be a good idea to move approximately half of your 401K holdings into a stable value fund. It's true, this does have an element of market timing. On the other hand, there is nothing wrong with being defensive when it is clear that the market is in a serious downtrend. In fact, the post was somewhat inspired by the writing of Random Roger who advises that investors avoid allowing their portfolios to go "down a lot" though "down a little" is probably unavoidable in a down market.
      
  29. FOREX Technical Analysis-

      EUR/USD pair overview for the 15th of July, 2008

  30. Freddie & Fannie: Double Trouble- Adam Hewison of Market Club recently released a brief educational video that details the fall in these stocks and what it might mean for the larger picture in his video released today entitled, “Freddie Mac and Fannie Mae:  Twin Disasters.” Hewison states in a post accompanying the video: “Even after Treasury Secretary Henry Paulson made a statement [...]
  31. College Kids Gone Wild- There is a site called College Analysts that aggregates content from about a dozen college students across the U.S. It has some decent content, and I have been a reader for some time.
      
      On Friday, the site took what I consider a disturbing foray away from Finance and Investments into Politics with a post blasting our nations alliance with Israel. The post was written by Stephen Frankola and contained many broad generalizations, factual errors and misstatements about the situation over in the Middle East.
      
      He argues that the birth of Israel was possibly "unfair," and that our alliance with Israel "has been the biggest foreign policy blunder since the Vietnam era."
      
      The post pretty much blames our support for Israel as causing hatred of us by the Arab population, high oil prices, and much of the terrorism directed against the United States. Or as he puts it:
      
  32. Canadian Solar (CSIQ) Raises Guidance - Stock up 15%- It is nice to finally be in a solar stock that understands how to manage Wall Street, unlike a stock we own that shall remain nameless - Canadian Solar (CSIQ) out with a Q2 revenue increase. However, no increase to earnings guidance.
  33. P/E Ratio by Position mid July Update- We try to compile a list of P/E ratios for the whole portfolio every so often - I'd do it more often but it all has to be done by hand; hopefully one day there will be a nice 1 button to press and I can get this sort of data daily. Until then, this is our latest installment.
      
      Earlier we explained the rationale behind the P/E ratio and how I use it in January [Jan 20: P/E Ratio for Portfolio]
      Our last update was in May which I updated some top line thoughts which I'll mostly cut and paste below [May 19: P/E Ratio by Position May Update]
      Recently we asked does P/E ratio even matter as some of the best performing stocks even in the recent carnage are those with the most astronomical valuations [Jul 2: Does Valuation Matter?] Great arguements can me made on both side but at heart I like growth at relative value in most cases (always make exceptions)
      
      Here are the key points we brought up in May
  34. Average Durations of Previous Bear Markets- On July 7, 2008 S&P 500 went into bear market territory after sliding 20% from its October 9th 2007 all-time highs at 1565.15. The current bear market correction has been going on for more than nine months. So how long do bear markets last on average?
      
      From the table below one could see that the average duration of bear markets has been about 18 months since the great depression. Since 1956 however the average duration of bear markets has been about fourteen months. The average decline since 1929 has been 38.2% versus 31.8% since 1956.
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
  35. Boring Week Closes, Leaves us Hoping for More Activity- July 13, 2008
      
      It was a down week for stocks and even though I gave the market only a side glimpse as I watched the overall stocks within the market–I know the trend is already sideways to down, it was quite clear that the few really nice charts that were left are starting to die like they have done so well of doing this year and that (something that could become more bullish later on) many of the big-cap oil, steel, metal, and chemical stocks all showed signs of possibly topping. Even if they have not topped, the fact is many of these have been running since 2001, 2002, and 2003. So if you are thinking of buying a new breakout, try to look at a longer-term weekly arithmetic chart before you go long that shorter-term intraday 60-minute logarithmic chart breakout. A little history and perspective will save you a fortune in learning cost, in the long-run.
      
  36. “Talk Story” about the Market- I have to admit, those that think it is wise to be either a bull or a bear here are doing themselves a major disservice by not studying the past. This market is clearly a range bound market and taking a bullish or bearish side on the overall market is a terrible thing to do.
      
      The correct stance to have is to be bullish in some sectors. Right now, to me, it is clearly obvious that the money is being made in energy stocks or even a couple select medical stocks. The one place you definitely do not want to be right now if you are looking to make money on the long side are the bank stocks which have 80 stocks hitting new 52-week lows. Besides the carnage in the Banks, Insurance, Leisure, Metals, and Real Estate stocks are seeing anywhere from 20 to 30 new lows daily. Now, if you are a bottom fisher trying to get the exact bottom of these stocks then you have suffered some serious damage.
      
  37. Stocks Look To Be Starting Another Trend Down. Well They Already Have But Now It Looks Like It Could Get Worse; I Hope I Am Wron- July 7, 2008
      
      If this is the case, as you can see, I KNOW there is only one smart thing to do and that is to raise cash. That is what I have recently been doing.
      
  38. Amazing How This Market Changes Like It Does. Now I Have Nice Charts Literally EVERYWHERE!- These charts that are setup in extremely bullish patterns right now, however, will probably be destroyed on Monday. However, just the thought of me thinking this might be the bearishness needed to make this rally attempt work. The bottom line today was that my scans "went off" with a ton of stocks giving long signals. Not only that but there are now so many stocks in my watch list that if this market starts moving, I am 100% sure I am going to have no problem making a lot of money.
      
  39. DJIA, SP-500, NYSE, and Nasdaq Breakdown On Very Strong Volume; The SP-600 (SmallCap Index) Is Starting To Show Strong Relative- Well there is absolutely nothing else that can describe Friday other than pure utter disappointment. I am telling you right now that the odds of us starting another leg lower has increased by leaps and bounds after Friday’s breakdown. Why? Because something that happened this time last happened in 2000. After an initial breakdown, some stocks recovered and some created very bullish chart patterns. After initially working, they soon all reversed as around August 2000 the stock market then resumed its trend lower. There is nothing that says that we are going to have a bear market like we did in 2000. However, the 10 new shorts that I have for Monday have the EXACT SAME PATTERNS that I saw in August to September of 2000.
      
  40. Friday's Reversal Destroys The Euphoria From Thursday; I Did Not Have A Single Long Give A Full Sell Signal (There Were A Good A- There is no other way to describe Friday as uglier than ugly. When you have 4-losers-to-every-1-winner you can be sure that it was a very ugly day. That ugliness can be blamed on the unemployment jumping to 5.5% from 5.0% which was the biggest gain in 20 years and oil jumping almost $11 and a total of $16 (13% gain) in two days which was also the biggest gain in 25 years when they started keeping records of oil. Economist were expecting the unemployment to only increase to 5.1% so this was a LARGE miss. You can't blame the market for doing what it did today after a miss of that magnitude, along with oil jumping 13% in two days.
      
      However, as I will be doing quite often, as I write this I will try to interject some bullish points to the negative headlines. For instance, it could have been 10-losers-to-every-1-winner. But, actually, that would be bullish as it would show the crowd was extremely bearish and I would be looking to get very long very quickly. Still there is nothing good to say about a day when losers did beat winners by such a strong amount.
      
  41. Looking For Leading Stocks- One thing that I do not hear a lot about but that is very clear to me is that stocks that are leading ARE REALLY leading. That can be seen especially when it comes to the amount of stocks that are hitting new 52-week highs. About a couple months ago things started to slowly change when new 52-week lows stopped expanding at the pace they were.
      
      After the March lows and a small market rally, the new high list started to slowly build. And now we are at a point where even on down days, the past two weeks, the amount of new highs either match, are breakeven, or barely losing to new lows.
      
      On Friday there were 244 new 52-week highs to 95 new 52-week lows. This was the best reading I have seen yet, since God knows when. I know in the August to October there were a lot of stocks hitting new highs but I am not sure it looked THIS GOOD then.
      
  42. HAPPY MEMORIAL DAY WEEKEND!!!!!!!!!!!- Happy Memorial Day Weekend. The new commentary will be fully updated by Tuesday morning.
  43. What A Difference One Week Makes; Leading Stocks Signal That There May Be More Work To Do Before A Real Strong Rally Can Ever Ta- There is no doubt that I am suffering my WORST Multiple Sclerosis attack to date. Since Saturday I have basically been bed ridden and RIGHT OFF THE BAT I want to apologies if any of this is a little hard to follow because I feel like trash. I am not sure if this will effect what I am about to write but do me a favor and do NOT bust my balls if I misplace a word or misspell a word. My life is too short to deal with this.
      
      I had a completely different approach in mind when I first wanted to write this but I figure I will stick with the facts. The facts are as quickly as this market looked like good times could be returning it in fact was possibly throwing us false "all clear" signal. Now while I never fully bought into this rally due to the volume, I still held hope that the rotation that I started to see into technology stocks would continue. Now I am beginning to wonder if that is what is happening or if they are making it appear that this was the case just to shut the door in our face.
      
  44. Very Bullish Week Ends With Us Set Up For Some Big Gains- It was nice to see oil stop rising to the moon and for stocks to still continue higher as a constant rotation from commodity into higher quality tech stocks does seem to be evolving. In fact, it appears commodity stocks are going to continue higher with those new leaders that are starting to emerge. I can only pray that this trend of prettier charts and higher quality longs continues to show in the market.
      
  45. Bullish Week Ends With Leading Stocks And The SOX Taking The Lead (Part Two)- Randomly continuing where we left off yesterday, besides the put/call showing a little of fear coming back into it even with some indexes higher. One index continues to print what should be considered bearish numbers. That is the VIX. The VIX closed at 16.47 Friday and intraday on Wednesday hit 16.10. That was the lowest reading since October right before the November top.
      
      I know I am very bullish on this market, even without volume, due to all the setups and charts that are already breaking out out there. But don't question if I would turn, if we got like three major distribution days in-a-row. If that was the case and there was no bounce here, then you have plenty of reasons to get bearish and top calling. But as long as we have stocks like EXM DRYS, and even CNQR showing up, I think I will hold off on top calling. For all I know it will take the put/call to hit .40 and the VIX to hit sub-10 before stocks finally top off this current run.
      
  46. Bullish Week Ends With Mixed Trading On The Major Market Indexes; Individual Stocks Are Starting To Look Real Good- It was another overall boring session to end the week but despite the overall boring tone to Friday's session it was still a bullish session underneath as many stocks had solid sessions and many stocks that I was long had a very positive session. Overall, profit taking was quite mild in the AM and the strong mid-day rally into the close shows the bears are still not in control.
      
      This kind of action on a do nothing day is just what I like to see in a market that refuses to do much. If there would have been a lot of blowups and negative action today, then I would have been a lot less enthusiastic about the non-event that Friday was.
      
      By the close, the NYSE was up .6%, the SP 500 was up .3%, and the DJIA was flat. The Nasdaq finished lower but the intraday support and positive action by the close is something that has to be considered positive overall. I mean obviously if this market was real weak they would have sold them into the close.
      
  47. Another Bullish Day Equals Another Great Day For Our Longs- Today was yet another day where the market did not do much but our longs crushed it. This time it was our recent solar stock purchases. This continues a very bullish pattern of where everything I buy continues to move higher. Once again, tonight there are four new longs and zero full sells. This has been a recurring theme and is a theme of any bullish market. Higher volume or not.
      
  48. Bullish Week Ends With Leading Stocks And The SOX Taking The Lead; The IBD 100 Finishes Up 4.2% And The SOX Finishes Up 5.8% Thi- There is really only one word to describe Friday's intraday action: bullish. Right off the bat, thanks to a report showing the University of Michigan consumer confidence number fell below 60 to a 28-year low, the Nasdaq fell 1.2% within the first two hours. This selling was pretty nasty but still the report should not have shocked the informed investors who saw the IBD/TIPP poll hit an all-time low last month. I am sure we can expect more of the same come Tuesday when the new data is released. Thankfully, for the bulls, cooler heads prevailed and quickly the consumer confidence news was taken as old news and shaken off.
      
      By the end of the day, it was an impressive turnaround on all the indexes, as everything closed near their HOD. The leading index was the NYSE which scored a .5% gain. The SP 500 also was up today, gaining .1%. On the other end, the Nassy lost .2% and the DJIA lost .1% but both still closed near their HOD. Considering the losses that all the indexes had going after the first two hours there is no other way to call today anything but a victory for the bulls.
      
  49. A Market That Moves On No Volume Should Be Treated With Caution- There is an old adage that goes "never short a dull market." I couldn't agree with that more and want to stress that it does not say "go all-in and long a dull market." No, it says, "never short a dull market." If we have to get down to the core of what that statement says it is clearly telling us that when volume is no where to be found the LAST thing you want to do is go short stocks as you are leaving yourself open to a large short-squeeze as usually happens in low volume markets.
  50. A Bullish Week Comes To A Close As Leading Stocks Lead The Market Higher; Volume Was Finally Over The 50 Day Volume Average On F- Friday turned out to be one of the best days without a doubt for the stock market in 2008 as the Nassy led the way with a 2.6% gain. Why Friday? Because this rally came not only on heavier volume but came after the indexes have already had a few up days. This is a confirmation of the follow-through day as volume was sharply higher on both indexes by 20%. Not only did the gains come on higher volume but leading stocks took charge once again as many leading stocks continued to setup in what are now nice looking bases--just a week ago they were not nearly as nice (this is why it is important to ALWAYS follow the market). That is what two very strong accumulation days will do when they are within three days. There are also plenty breaking out to new highs on strong volume and the fact that they are in so many broad sectors is bullish.
      
  51. Another Very Quiet Day And Another Very Bullish Day For Our Longs; Fed Meeting Should Produce A One And Done...- It was a very quiet day of trading and until the very last hour appeared to be the lowest volume day the entire year. However, a pickup in action the past hour prevented that from happening. But instead of a rush to buy stocks there was a small little rush to sell. That helped take the indexes off their highs and helped leave them basically flat for the day with most indexes up or down between up .1% and down .2%. The biggest moving index was the SP 600 with a walloping .6% rally.
      
  52. Stocks Reverse Hard Selling Off All Session Into The Close, Closing Near The LOD; Lower Volume Eases Selling Pressure But Some L- The morning got off to a good start as the indexes gapped higher and started off strong right out of the gate, with the Nasdaq leading the way higher with a 1% gain. After that, sadly for the bulls, it was nothing but a slightly choppy ride lower with the market selling off the entire way lower with the 1% gain in the Nassy turning into a .9% loss by the EOD. The DJIA closed near the session lows for the second straight session. This was not a bullish session, to say the least.
      
      Despite the losses, there was one bit of good news that can be taken away from this session and that is that volume was lower across the board. In fact, Friday's volume was the lowest turnover of 2008 and shows that institutional investors who make up over 75% of the volume in the stock market were not active at all. Still, you can't get too excited about low volume pullbacks when they come after low volume rallies.
      
  53. Low Volume Consolidation After The Big April Fools Rally Is So-Far So-Good; CANSLIM Stocks Setup And Breakout But Volume Is Stil- A weak open after a very poor employment report that showed the US lost 80,000 jobs in March with the unemployment rate moving up to 5.1%. It was a pretty lousy number but considering the fact that we had 25% unemployment after the crash of 1929 it isn't "that" horrible. But the media, with a Republican still in White House, of course, made it sound like all hell was breaking was loose.
      
      Maybe that is why the market could not build on the weakness and instead rallied higher the rest of the day off the lows until 2pm when traders unwound some of their longs into the weekend. Overall though, it was very positive action, following a strong rally on April Fool's Day. That now makes it three constructive sessions in-a-row where stocks have held on to the gains.
      
  54. BSC Blowup Proves A Chronic Emailer Wrong And, Once Again, Proves The Power Of CANSLIM; Stock Market Indexes Selloff On Mixed Vo- Please Note: Starting next week this free weekly commentary will only be available at BigWaveTrading.net so be sure to check out the new FREE site sponsored by BigWaveTrading.com where Joshua Hayes and Market Speculator will be regularly posting some additional commentary about the markets.
      
      Today was another day in the stock market that has just gone to prove that cash is in fact king. When you try to play a stock market with a heavy hand or even on margin in an environment like this you either have a serious illness or you just have never taken the time to study history and to have learned that the smartest thing to do is NOTHING. A stock market that is this volatile that has THIS MANY BLOWUP is definitely not a stock market you want to be messing with.
      
  55. Problematic Follow-Through Day Is Not All It Appears To Be; We Have Gone NOWHERE In Two Months, Proving Cash Is King!- A lot of people have recently just gotten used to being in cash as the bear market has finally convinced some that the best side is the sidelines. But as soon as a lot of these people realize it is best to park their cash, all of a sudden we have the market following-through on its rally that started eight days ago on 3/11. That is when the DJIA made its lows, reversing off of them and closing higher at the HOD by the EOD. While every index undercut those lows on 3/17, the DJIA did not and instead held. This has now led to today's 2.16% rally on very strong volume. A weekly chart of the DJIA since 3/11 is very bullish. However, when we take a step back and look at where the index is coming from, it isn't that impressive yet.
      
  56. Stocks Selloff On Higher Volume, Helping Send Some Indexes To New 52-Week Closing Lows- Stocks sold off yet again but this time it did so on higher volume which is helping make my point that selling can start off slowly and pickup as it sells off. If you look at the downtrend since last February, you can see that this is the case now as it has been in the past with other market selloffs.
      
      The good news, today, is that, like most sessions recently, the market staged a very volatile and powerful reversal. This time it was to the bull side and it was needed for the trapped longs as stocks looked like they were going to put in another very bearish day of trading.
      
  57. It's About Time!; Stocks Breakdown From The Triangle Consolidation (NYSE Reverses Its Breakout), On Much Heavier Volume- Well, I guess, all I can say is, so much for that rally. There were a lot of people that were very confident that the lows in this market were seen on 1/22 and 1/23. Those people that believe that is the case still, are living in serious denial about the true problems this market has. Unless you are only focused on the oil, gold, steel, metal, food, ag, machinery, or chemical stocks, there is no way anyone can be serious when they say they are bullish on this market. Everywhere I look I see some big damage that was caused by today's selloff and the reality of the situation is very clear to me. This market is not a market to buy.
      
      Today, stocks were crushed, as a raft of poor economic data and more subprime BS slammed the door in the face of the bottom-callers. Part of it was due to the consumer as for the third month in four their was no growth in spending. And for those that truly do not grasp how important that is, I hope I can help convince you, along with IBD, that it is indeed very important.