Gas is down 40 cents, the US consumer is back! Pile in! Pile in!
Not so much.... as I keep saying each time these consumer discretionary stocks [Stuff I've Been Negative on Since Last Fall] jump on Kool Aid recovery talk - they just create yet another opportunity to short - the danger is timing. 3 casino stocks rolling right back over. Again we cannot short individual stocks in the current situation but this is simply the easiest way to make money the past year - let the "junk" to their oversold rallies and then get short. We're losing a lot of return by not being able to do this.
I don't see gas prices jumping up the past few sessions, so I wonder why this is when the theory was how great everything would be as gas prices fell? Ah yes - reality. Just 8 days ago these stocks were ramping up 12-14% [Aug 11: The "Turn" Appears to be Here]
Some amazing action out of the retailers - see Coach (COH) - and which we considered last week continues to fly. Lots of tried and true shorts over the past year such as Polo Ralph Lauren (RL)Harley Davidson (HOG) are simply unstoppable right now as oil heading to $24 brings the US economy back ;) I'd be unsurprised to see restaurants also fly. Once again, this is simply the opposite trade of everything that has worked the past year to short - casinos should also ramp. It is quite a simplistic thinking but it is what it is - look at up 10%, Wynn Resorts (WYNN) MGM Mirage (MGM) up 14%. It is truly amazing how the entire world has changed by a 40 cent drop in gasoline prices - headed to 65 cents.
A month earlier? [Jul 11: Gaming Stocks Absolutely Destroyed Yesterday]
Did I mention avoid anything to do with the U.S. consumer? Yesterday...
- Wynn Resorts (WYNN) down 10%
- Las Vegas Sands (LVS) down 11%
- (grand prize to) MGM Mirage (MGM) down 21%
Have I mentioned this is not a buy and hold market. Nothing but traders moving stocks up and down to create some return for their funds. This is all the market has become. Did anything change fundamentally from 3 months ago? 2 months ago? 1 month ago? I know - I know - gasoline is down 40 cents so everything is fine in the United States of Subprime! But it didn't pop back up today - did everything revert away from "fine" the past 3 trading sessions? I only type this so for all of you who sit there and wonder "why is my stock doing this or that" and try to attach logic or fundamental reasons to it - to urge you to stop doing that. Save yourself the grief. Your stocks are in the hands of others and it's like balls of yarns for big cats - very big cats - with a lot of money and leverage. Fundamentals are not changing - just shorting, short covering, naked shorting, leveraged long positions, etc etc etc.
Fundamentals? So old school. Check back in about 6-8 weeks when these stocks go back on another 40% run upward. And then fall back down in 11-13 weeks. Rinse. Wash. Repeat. Since this is the only way to make money anymore and buying companies on their actual business is useless, I expect myself to be the proud owner of one of these gaming stocks in a few weeks so that I too, can yell about the upcoming economic recovery (even though the moves have nothing to do with fundamentals) and cheer these on as their fundamentals degrade. MGM is so bad you cannot even see the 200 day moving average on the chart anymore.
No positions but yearning to be long a casino stock in about 3 weeks - or maybe an airline or automaker
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