THE TAPE:
UP
THE STORY:
This has been a week of "firsts" as recent history is concerned. It was the first week that the broad markets have shown a meaningful gain. It was also the first weekend in quite a while where my wife and I had consecutive days alone, so my enthusiasm to post has waned. I will most likely make up for it later this week.
In short, anything could happen this week. Credit ratings companies has reversed their opinions that the outlook for the financial sector is positive. That said, it looks like we are putting in higher lows and higher highs in quite a few of the sectors which tells us that there is a bottom coming in those areas. Commodities and metals are falling off (hope you took profits in gold). Talk to you soon.
Showing posts with label market. Show all posts
Showing posts with label market. Show all posts
Sunday, March 23, 2008
Sunday, March 16, 2008
Market Wrap- 2008 Week 11
THE TAPE:
DOW: +58 (+o.48%)
S&P: -5 (-0.34%)
NASDAQ: unchanged
RUSSELL: +3 (+0.31%)
THE STORY:
For those of us that trade a primarily directional strategy (puts/calls, longs/shorts), this week was just a big pain in the ass. For those that trade delta neutral strategies (spreads etc.) this week was ideal. The volatility/range this week was enough to make even the most salty of sailors seasick (pardon the alliteration). So what caused all of the volatility? Here it is blow by blow:
Monday was nothing more than a nice continuation of the previous week's selling.
Then Tuesday, ol' Jackass decided to throw another $200 billion (with a b) at the credit market. Here is a snippet from Yahoo! Finance: Wall Street rebounded sharply Tuesday after the Federal Reserve and other central banks said they will pump $200 billion into the financial markets to help ease the strain from the credit crisis. Get this... the government has now thrown over $1 trillion (with a t) at the market since October. I mean holy shit! This and the $500 billion (with a b) war in the Middle East, and we still keep printing money. But I digress. As a result of Jackass and his "benevolence" errrrrr.... stupidity, the market jumped HUGE.
On Wednesday, the mindless buying continued until the Commerce Department reported that the United States' trade deficit grew larger in January to $58.2 billion (with a b). This sobered up the bulls and some very healthy selling ensued.
On Thursday, the selling continued in the 1st hour of trading until the S&P came out with a report that the sub-prime and credit write downs were pretty much over for the large banks and brokers. In short "we are in the clear". This report was met with more buying and the market ended up pretty large.
On Friday we learned that the guys at S&P are real fucking jerks as Bear Stearns and Co. (BSC) admitted that they are in "dire financial straits". Thanks for the Thursday report S&P! The result was a complete reversal of Thursday's buying and the market ended up virtually unchanged for the week.
This is a 5 day chart of the S&P 500 with labels of the play by play:
So you can see a couple things here. 1) We had some unbelievable moves this last week. 2) We ended the week pretty much exactly where we started.
THE WEEK AHEAD: more of the same.
To begin with, it is a short week with the market closed on Good Friday. Also, Thursday is a triple witching. What is triple witching you ask? It is considered a "witching" on days when contracts expire. The "triple" comes in when equity options, index options, and futures expire all on the same day. When this happens there is a historically large amount of volatility that week because market makers are being tight asses on the spreads that they offer, and traders (institutional and retail alike) are running to take profits or to shore up losses.
Monday is St. Patrick's Day which has been an up day 75% of the time. Thursday before Good Friday has been a down day 80% of the time. I could go on and on pulling stats and quotes from the Stock Trader's Almanac to support the idea that this will be another rocky week, but you and I both know that the market is in an area where a decision must be made. Remember that LINE I mentioned last week? There will be a pretty big territorial pissing match between the bulls and bears over that line, and until there is a clear winner, it is going to be wild.
Also, there will be no watch list or charts provided until there is a clear winner of that fight. I would hate to lay a ton of bearish ideas on the line while the market is finding a bottom. Hang on tight this week.
Oh yeah... I almost forgot. Genius does have its rewards.
DOW: +58 (+o.48%)
S&P: -5 (-0.34%)
NASDAQ: unchanged
RUSSELL: +3 (+0.31%)
THE STORY:
For those of us that trade a primarily directional strategy (puts/calls, longs/shorts), this week was just a big pain in the ass. For those that trade delta neutral strategies (spreads etc.) this week was ideal. The volatility/range this week was enough to make even the most salty of sailors seasick (pardon the alliteration). So what caused all of the volatility? Here it is blow by blow:
Monday was nothing more than a nice continuation of the previous week's selling.
Then Tuesday, ol' Jackass decided to throw another $200 billion (with a b) at the credit market. Here is a snippet from Yahoo! Finance: Wall Street rebounded sharply Tuesday after the Federal Reserve and other central banks said they will pump $200 billion into the financial markets to help ease the strain from the credit crisis. Get this... the government has now thrown over $1 trillion (with a t) at the market since October. I mean holy shit! This and the $500 billion (with a b) war in the Middle East, and we still keep printing money. But I digress. As a result of Jackass and his "benevolence" errrrrr.... stupidity, the market jumped HUGE.On Wednesday, the mindless buying continued until the Commerce Department reported that the United States' trade deficit grew larger in January to $58.2 billion (with a b). This sobered up the bulls and some very healthy selling ensued.
On Thursday, the selling continued in the 1st hour of trading until the S&P came out with a report that the sub-prime and credit write downs were pretty much over for the large banks and brokers. In short "we are in the clear". This report was met with more buying and the market ended up pretty large.
On Friday we learned that the guys at S&P are real fucking jerks as Bear Stearns and Co. (BSC) admitted that they are in "dire financial straits". Thanks for the Thursday report S&P! The result was a complete reversal of Thursday's buying and the market ended up virtually unchanged for the week.
This is a 5 day chart of the S&P 500 with labels of the play by play:
So you can see a couple things here. 1) We had some unbelievable moves this last week. 2) We ended the week pretty much exactly where we started.
THE WEEK AHEAD: more of the same.
To begin with, it is a short week with the market closed on Good Friday. Also, Thursday is a triple witching. What is triple witching you ask? It is considered a "witching" on days when contracts expire. The "triple" comes in when equity options, index options, and futures expire all on the same day. When this happens there is a historically large amount of volatility that week because market makers are being tight asses on the spreads that they offer, and traders (institutional and retail alike) are running to take profits or to shore up losses.
Monday is St. Patrick's Day which has been an up day 75% of the time. Thursday before Good Friday has been a down day 80% of the time. I could go on and on pulling stats and quotes from the Stock Trader's Almanac to support the idea that this will be another rocky week, but you and I both know that the market is in an area where a decision must be made. Remember that LINE I mentioned last week? There will be a pretty big territorial pissing match between the bulls and bears over that line, and until there is a clear winner, it is going to be wild.
Also, there will be no watch list or charts provided until there is a clear winner of that fight. I would hate to lay a ton of bearish ideas on the line while the market is finding a bottom. Hang on tight this week.
Oh yeah... I almost forgot. Genius does have its rewards.
Friday, March 14, 2008
Phewww!
Last week the sentiment was "what a week". This week could also qualify as "what a week" but with daily doses of asprin and pepto. I will be back in a day or so explaining why this was such a turbulent market week. For this weekend, I really want you to clear the mechanism. And I really do mean it this time. I will be up to the same tomfoolery this weekend as last. Tonight is curling (and the wife has brought some new recruits) with a possible visit to the public house afterward, with a definite 12 years old waiting in the wings. If you got your ass handed to you this week, shake it off and prepare for more of the same next week. I'll be back with more.
Sunday, March 9, 2008
Market Wrap- 2008 Week 10
THE TAPE:
DOW: -373 (-3.03%)
S&P: -37 (-2.84%)
NASDAQ: -59 (-2.67)
RUSSELL: -26 (-3.73%)
THE STORY:
I hope everyone took my advice and had a nice relaxing weekend. I'll tell you what... curling is not so much relaxing but a big kick in the ass. I will have more on that in a later post.
I'll be quick.
Last week was exactly what we thought it was going to be. Hopefully, you were on board the short side of the market. I present the S&P:
Given that we still have some downside to go, I have found a few charts that could be interesting in the coming weeks.
And now time for the reality check. On the DOW, we have passed down below the very psychologically important 12k line. However, there is a lot of mess stacked up against us in the form of support. The next chart you will see is a 10 year chart on the DOW. I have drawn in a rather significant line with three points of interest. The first point is the peak of the tech bubble before one of the most magnificent bear markets we have ever had. The second point is the mid year peak in '06 when we failed to break the previous all time high (see point 1). The third point took place about 4 or 5 weeks ago when the world market had a serious breakdown and subsequent recovery all within a 48 hour time frame, a la Jackass and his emergency rate cut.
All this to say, we are drawing ever nearer to that line. In fact, for our short term triangle to be a success, we need to actually BREAK the line. I don't really know what to do about this other than wait. The point right now is awareness. Consider yourself informed.
This week, I would not be surprised if we consolidate a bit to the upside and then head south again. Be patient yet aggressive and kick some ass.
DOW: -373 (-3.03%)
S&P: -37 (-2.84%)
NASDAQ: -59 (-2.67)
RUSSELL: -26 (-3.73%)
THE STORY:
I hope everyone took my advice and had a nice relaxing weekend. I'll tell you what... curling is not so much relaxing but a big kick in the ass. I will have more on that in a later post.
I'll be quick.
Last week was exactly what we thought it was going to be. Hopefully, you were on board the short side of the market. I present the S&P:
Given that we still have some downside to go, I have found a few charts that could be interesting in the coming weeks.
And now time for the reality check. On the DOW, we have passed down below the very psychologically important 12k line. However, there is a lot of mess stacked up against us in the form of support. The next chart you will see is a 10 year chart on the DOW. I have drawn in a rather significant line with three points of interest. The first point is the peak of the tech bubble before one of the most magnificent bear markets we have ever had. The second point is the mid year peak in '06 when we failed to break the previous all time high (see point 1). The third point took place about 4 or 5 weeks ago when the world market had a serious breakdown and subsequent recovery all within a 48 hour time frame, a la Jackass and his emergency rate cut.
All this to say, we are drawing ever nearer to that line. In fact, for our short term triangle to be a success, we need to actually BREAK the line. I don't really know what to do about this other than wait. The point right now is awareness. Consider yourself informed.
This week, I would not be surprised if we consolidate a bit to the upside and then head south again. Be patient yet aggressive and kick some ass.
Friday, March 7, 2008
What a Week!
If you were paying attention last week you should have had a ball over the last five days of trading. As always I will be back later on to highlight some of this weeks moves and forecast some more brilliance for you. Until then, my advice is to uncork that bottle of 10 years old and take in a movie. As a trader you need to make sure to clear the mechanism over the weekend no matter what the previous week's results. For me, it is good Chinese, a bottle of Uigeadail (review pending), good friends, and curling. See you soon.
Monday, March 3, 2008
Market Wrap Addendum
Here are a few items on my watch list for the week:Bulls: GOLD, GLD, DBA, CF, POT
Bears: APH, WBD, RGA, GVA, FFH, FLIR
If you have any questions let me know. This week is going to kick some serious ass. Don't miss out.
Sunday, March 2, 2008
Market Wrap- 2008 Week 9
THE TAPE:
DOW: -115 (-0.94%)
S&P: -23 (-1.65%)
NASDAQ: -32 (-1.36%)
RUSSELL: -9 (-1.28%)
THE STORY:
Every economic announcement that was released reflected what we already know: bad things. Ol' Jackass talked to congress for a while and pretty much told them what I have already told you... another 50 basis points in March. All you homeowners (if you have equitable room) may want to think about refinancing this summer. We probably have 2 more cuts coming after this one. He also talked about stagflation worries... which we also already knew. Oil broke $100, commodities are through the roof, and gold is up to $975. The problem comes in when I say those prices are going up and the value of the $$$$ continues to fall.
The GREAT news is that we know how to profit when everyone else is miserable, and we have what appears to be some pretty clear direction. The triangles I have been talking about for the last couple of weeks are becoming decisive. Take a look at two time frames on the S&P:
Also, take a look at LM. We have talked about this one for a least a month now. Talk about a clear break...
Feel free to jump on that train any time. It could take a while, I am looking at about a $47 price target on this one, which matches up with lows from 2004. Happy selling (or buying puts) this next week(s). Take a look at last weeks watch lists for some bearish ideas. A relatively low cost, semi-conservative play would be on the index ETFs. Those are QQQQ, DIA, SPY, and IWM.
Manage risk. That is all that matters.
DOW: -115 (-0.94%)
S&P: -23 (-1.65%)
NASDAQ: -32 (-1.36%)
RUSSELL: -9 (-1.28%)
THE STORY:
Every economic announcement that was released reflected what we already know: bad things. Ol' Jackass talked to congress for a while and pretty much told them what I have already told you... another 50 basis points in March. All you homeowners (if you have equitable room) may want to think about refinancing this summer. We probably have 2 more cuts coming after this one. He also talked about stagflation worries... which we also already knew. Oil broke $100, commodities are through the roof, and gold is up to $975. The problem comes in when I say those prices are going up and the value of the $$$$ continues to fall.
The GREAT news is that we know how to profit when everyone else is miserable, and we have what appears to be some pretty clear direction. The triangles I have been talking about for the last couple of weeks are becoming decisive. Take a look at two time frames on the S&P:
Also, take a look at LM. We have talked about this one for a least a month now. Talk about a clear break...
Feel free to jump on that train any time. It could take a while, I am looking at about a $47 price target on this one, which matches up with lows from 2004. Happy selling (or buying puts) this next week(s). Take a look at last weeks watch lists for some bearish ideas. A relatively low cost, semi-conservative play would be on the index ETFs. Those are QQQQ, DIA, SPY, and IWM.Manage risk. That is all that matters.
Friday, February 22, 2008
Market Wrap- 2008 Week 8
THE TAPE:
DOW: +33 (+0.25%)
S&P: +3 (+0.22%)
NASDAQ: -18 (-0.71%)
RUSSELL: -6 (-0.84%)
THE STORY:
There really is no story here. I suppose the only item of note would be the tremendous late Friday rally. It looked like we were going to break the recently mentioned triangle to the downside for the majority of Friday until the last 30 minute rally by the bulls which kept the pattern intact. Take a look at some S&P charts:
Now zoomed in to a 5 day chart:
As far as charts for next week, we are still looking at quite a few triangles. The next list is comprised of stocks that have already broken, but are retesting for support/resistance levels for low risk re-entry/adds:
ADM, AEM, BVN, EDU, GOLD, NOV, YUM
The following are stocks that we are still patiently waiting on:
BCE, BCR, DIA, IWM, LM, LRCX, QQQQ, SPY, SWK
Lastly, I want to talk about MYGN for the final time. I took profits on this triangle play a couple of days ago right at the bottom. This will be our prime example of a descending triangle moving forward. Take a look at the charts:
Now zoomed in:
Final topic(s):
Moving into next week, lets just be patient and wait for a break in the major markets to pick a bias. Let me stress the word patient again... go back up and look at the chart from Friday on the S&P. If you go all in too early and get whipped out, its going to hurt, and then you are going to be too timid to get in on the real break and will miss out on quite a bit of profit.
I noticed a spike in user volume on Friday. This tells me that there are quite a few people interested in my Market Wrap posts. I would like to hear from you in the comments section. Whatever you want to learn/talk about is important for this particular topic. I will try my hand at an online poll, but until then let me know your thoughts. Thanks.
*UPDATE*
The online poll is open until next Thursday. Please only vote once so there is no skew in the results. You can find the poll on the left side of the blog under the "about me" section.
DOW: +33 (+0.25%)
S&P: +3 (+0.22%)
NASDAQ: -18 (-0.71%)
RUSSELL: -6 (-0.84%)
THE STORY:
There really is no story here. I suppose the only item of note would be the tremendous late Friday rally. It looked like we were going to break the recently mentioned triangle to the downside for the majority of Friday until the last 30 minute rally by the bulls which kept the pattern intact. Take a look at some S&P charts:
Now zoomed in to a 5 day chart:
As far as charts for next week, we are still looking at quite a few triangles. The next list is comprised of stocks that have already broken, but are retesting for support/resistance levels for low risk re-entry/adds:
ADM, AEM, BVN, EDU, GOLD, NOV, YUM
The following are stocks that we are still patiently waiting on:
BCE, BCR, DIA, IWM, LM, LRCX, QQQQ, SPY, SWK
Lastly, I want to talk about MYGN for the final time. I took profits on this triangle play a couple of days ago right at the bottom. This will be our prime example of a descending triangle moving forward. Take a look at the charts:
Now zoomed in:
Final topic(s):
Moving into next week, lets just be patient and wait for a break in the major markets to pick a bias. Let me stress the word patient again... go back up and look at the chart from Friday on the S&P. If you go all in too early and get whipped out, its going to hurt, and then you are going to be too timid to get in on the real break and will miss out on quite a bit of profit.
I noticed a spike in user volume on Friday. This tells me that there are quite a few people interested in my Market Wrap posts. I would like to hear from you in the comments section. Whatever you want to learn/talk about is important for this particular topic. I will try my hand at an online poll, but until then let me know your thoughts. Thanks.
*UPDATE*
The online poll is open until next Thursday. Please only vote once so there is no skew in the results. You can find the poll on the left side of the blog under the "about me" section.
Friday, February 15, 2008
Market Wrap- 2008 Week 7
THE TAPE:
DOW +166 (+1.42%)
S&P +19 (+1.41%)
NASDAQ +17 (+0.77%)
RUSSELL +3 (+0.43%)
THE STORY:
This week we had a pretty volatile range because of two loudmouth guys. First, Warren Buffett came out and declared that he was backing bond issuers and offered stops to the credit market. That sent the market higher. Second was good ol' Jackass. He finally admitted (in public) that the economy may be a little worse than he had originally thought. That sent the market lower. He followed that up with a virtual guarantee on the March Fed meetings resulting in another rate cut.
Interesting though... last month, if he said ANYTHING about potential future rate cuts, the DOW would have gone up 200-300 points in about 5 minutes. This week, it was the beginning of the end of the "Buffett Rally". I think The Street has finally decided that his bark and his bite are both pretty weak.
From a technical standpoint, we now have some ideas to support the retest and possible break of prior lows. Take a look at the DOW.
So we have a pretty nice consolidation over the last couple of weeks and the triangle is shaping up pretty nicely. Triangles can be used to forecast future moves by time and distance. On the same chart (zoomed in), take a look at the last time we had a triangle that broke down:
You will find that, most of the time, when a major index sets up in a certain pattern or trend, it is reflected in individual stocks as well. Here are some triangles to watch for the next week or so. I have left the charts out because of the length of the list: ADM, BCE, BVN, CMI, CTRP, FNM, FRE, GILD, GLD, HANS, HOS, ITC, JEC, LM, LRCX, NOV, NUE, PDGI, SLB, STJ, SWK, YUM.
Since we have talked about MYGN for the last couple of weeks, I thought it appropriate continue the follow up. For those who took profit, congrats. For those waiting for the next level... well... take a look:
At the next support area, I am most likely going to shed at least half my position, if not take the whole thing to the bank. That area of support represents the target price for the triangle that prompted the trade in the first place.
You will also notice that GLD is in the list above. If you have been frustrated that you have missed prior moves in the metal, perhaps a break of the pattern would be an appropriate entry point.
DOW +166 (+1.42%)
S&P +19 (+1.41%)
NASDAQ +17 (+0.77%)
RUSSELL +3 (+0.43%)
THE STORY:
This week we had a pretty volatile range because of two loudmouth guys. First, Warren Buffett came out and declared that he was backing bond issuers and offered stops to the credit market. That sent the market higher. Second was good ol' Jackass. He finally admitted (in public) that the economy may be a little worse than he had originally thought. That sent the market lower. He followed that up with a virtual guarantee on the March Fed meetings resulting in another rate cut.Interesting though... last month, if he said ANYTHING about potential future rate cuts, the DOW would have gone up 200-300 points in about 5 minutes. This week, it was the beginning of the end of the "Buffett Rally". I think The Street has finally decided that his bark and his bite are both pretty weak.
From a technical standpoint, we now have some ideas to support the retest and possible break of prior lows. Take a look at the DOW.
So we have a pretty nice consolidation over the last couple of weeks and the triangle is shaping up pretty nicely. Triangles can be used to forecast future moves by time and distance. On the same chart (zoomed in), take a look at the last time we had a triangle that broke down:
You will find that, most of the time, when a major index sets up in a certain pattern or trend, it is reflected in individual stocks as well. Here are some triangles to watch for the next week or so. I have left the charts out because of the length of the list: ADM, BCE, BVN, CMI, CTRP, FNM, FRE, GILD, GLD, HANS, HOS, ITC, JEC, LM, LRCX, NOV, NUE, PDGI, SLB, STJ, SWK, YUM.
Since we have talked about MYGN for the last couple of weeks, I thought it appropriate continue the follow up. For those who took profit, congrats. For those waiting for the next level... well... take a look:
At the next support area, I am most likely going to shed at least half my position, if not take the whole thing to the bank. That area of support represents the target price for the triangle that prompted the trade in the first place.
You will also notice that GLD is in the list above. If you have been frustrated that you have missed prior moves in the metal, perhaps a break of the pattern would be an appropriate entry point.
Friday, February 8, 2008
Market Wrap- 2008 Week 6
The Tape:
DOW -561 (-4.44%)
S&P -64 (-4.68%)
NASDAQ -109 (-4.76%)
RUSSELL -32 (-4.33%)
The Story:
First, I must apologize for last week's post. I was running behind and was about 8 fingers into a nice bottle of Caol Ila (review pending). I wasn't quite up to the task of analysis or too much chart review, but this week I hope to remedy that.
If you look at the chart of the DOW from last week, you will see the defined level of resistance the market was up against. It did not fail to hold. If it is the jury's pleasure, I present Exhibit A:
We came off of that high like a waterfall didn't we? Now, you may want some kind of story or analysis as to why this happened. Let me put it this way. If I need to tell you, you haven't been reading my Market Wrap posts very thoroughly and you need a review.
Congratulations to anyone who has taken the MYGN short/put trade. It has turned out nicely. You will find some thoughts on Exhibit B:
So, February (not to mention the whole year to date) has been a dog so far. I'm not planning on seeing any improvements in the near term. Jackass has put himself in quite a position. The Fed Funds Rate has pretty much been cut in half over the last six months, and he doesn't have too much more room to go before he is giving away money for free. Don't get me wrong... we will see another 50 basis point cut in March, but it is dangerous to go too far. Wall Street knows this, so future cuts may not be met with a week of frenzied buying the way they have in the last couple of months. February will most likely see some more selling followed by consolidation followed by more selling followed by et cetera, et cetera. Since we are planning on that (right or wrong) here are a few charts to watch in the coming weeks.
Click the charts if you are having a tough time reading the notes.
As always, owning gold (GLD, GDX) is a good idea (I will say it until it hits $1000/oz). If you are looking at any charts or have ideas, I would love to hear about them. I may even highlight them on next weeks Market Wrap.
DOW -561 (-4.44%)
S&P -64 (-4.68%)
NASDAQ -109 (-4.76%)
RUSSELL -32 (-4.33%)
The Story:
First, I must apologize for last week's post. I was running behind and was about 8 fingers into a nice bottle of Caol Ila (review pending). I wasn't quite up to the task of analysis or too much chart review, but this week I hope to remedy that.
If you look at the chart of the DOW from last week, you will see the defined level of resistance the market was up against. It did not fail to hold. If it is the jury's pleasure, I present Exhibit A:
We came off of that high like a waterfall didn't we? Now, you may want some kind of story or analysis as to why this happened. Let me put it this way. If I need to tell you, you haven't been reading my Market Wrap posts very thoroughly and you need a review.
Congratulations to anyone who has taken the MYGN short/put trade. It has turned out nicely. You will find some thoughts on Exhibit B:
So, February (not to mention the whole year to date) has been a dog so far. I'm not planning on seeing any improvements in the near term. Jackass has put himself in quite a position. The Fed Funds Rate has pretty much been cut in half over the last six months, and he doesn't have too much more room to go before he is giving away money for free. Don't get me wrong... we will see another 50 basis point cut in March, but it is dangerous to go too far. Wall Street knows this, so future cuts may not be met with a week of frenzied buying the way they have in the last couple of months. February will most likely see some more selling followed by consolidation followed by more selling followed by et cetera, et cetera. Since we are planning on that (right or wrong) here are a few charts to watch in the coming weeks.
Click the charts if you are having a tough time reading the notes.
As always, owning gold (GLD, GDX) is a good idea (I will say it until it hits $1000/oz). If you are looking at any charts or have ideas, I would love to hear about them. I may even highlight them on next weeks Market Wrap.
Sunday, February 3, 2008
Market Wrap- 2008 Week 5
THE TAPE:
DOW +536 (+4.39%)
S&P +65 (4.86%)
NASDAQ +87 (+3.74%)
RUSSELL +42 (6.07%)
THE STORY:
This week was a seemingly futile buying frenzy in this author's opinion. Now, I could be DEAD wrong, but according to statistical analysis on Kohler's blog, we are in for a little bit more selling. I will let his blog tell the potential story this week.
Gold (GDX, GLD) has been holding up nicely. We are still waiting on LM, while MYGN is still in selling range. Take a look at the DOW (and other general markets) for resistance potential.
DOW +536 (+4.39%)
S&P +65 (4.86%)
NASDAQ +87 (+3.74%)
RUSSELL +42 (6.07%)
THE STORY:
This week was a seemingly futile buying frenzy in this author's opinion. Now, I could be DEAD wrong, but according to statistical analysis on Kohler's blog, we are in for a little bit more selling. I will let his blog tell the potential story this week.
Gold (GDX, GLD) has been holding up nicely. We are still waiting on LM, while MYGN is still in selling range. Take a look at the DOW (and other general markets) for resistance potential.
Friday, January 25, 2008
Market Wrap- 2008 Week 4
THE TAPE:
DOW +107 (+0.8%)
S&P +5 (+0.4%)
NASDAQ -14 (-0.6%)
RUSSELL +15 (+2.2%)
THE STORY:
There was huge range with week. The DOW whipped around to the tune of 852 points.
Two major reasons sparked the volatility: 1) A global panic sell off was created over MLK day as a result of banking fraud in... you guessed it... France. 2) Jackass cut a major chunk out of the fed funds rate, slashing it by 75 basis points, sending stocks higher. This hasn't been done since Dad was paying 18% on his house in the early 80's.
Some people think that we have hit a bottom in the downtrend. Morons, all of them. The fed meets again next week for their "scheduled rate cut" where we should get another 25 basis points or so. I'm quite convinced that this will disappoint and we will see more selling next week. February will probably see some basing and consolidation... but we will cross that bridge when we get there.
Congratulations for anyone who decided to take the gold (GLD, GDX) trade and made some money over the past week. $1000 is just around the corner. Know it. Own it. We are still waiting on LM, while MYGN broke down last week. After last weeks strength (however mild it was) we have some great entries for shorting the market.
Keep an eye on: BHI, GOOG, CX, SWK, MTB, LTM, LIFC, NILE,
DOW +107 (+0.8%)
S&P +5 (+0.4%)
NASDAQ -14 (-0.6%)
RUSSELL +15 (+2.2%)
THE STORY:
There was huge range with week. The DOW whipped around to the tune of 852 points.
Two major reasons sparked the volatility: 1) A global panic sell off was created over MLK day as a result of banking fraud in... you guessed it... France. 2) Jackass cut a major chunk out of the fed funds rate, slashing it by 75 basis points, sending stocks higher. This hasn't been done since Dad was paying 18% on his house in the early 80's.
Some people think that we have hit a bottom in the downtrend. Morons, all of them. The fed meets again next week for their "scheduled rate cut" where we should get another 25 basis points or so. I'm quite convinced that this will disappoint and we will see more selling next week. February will probably see some basing and consolidation... but we will cross that bridge when we get there.
Congratulations for anyone who decided to take the gold (GLD, GDX) trade and made some money over the past week. $1000 is just around the corner. Know it. Own it. We are still waiting on LM, while MYGN broke down last week. After last weeks strength (however mild it was) we have some great entries for shorting the market.
Keep an eye on: BHI, GOOG, CX, SWK, MTB, LTM, LIFC, NILE,
Friday, January 18, 2008
Market Wrap- 2008 Week 3
THE TAPE:
DOW -515 (-4.09%)
S&P -77 (-5.5%)
NASDAQ -99 (-4.1%)
RUSSELL -31 (-4.5%)
THE STORY:
Last week I talked about the credit and housing problems that are taking quite a toll on the market. I also said that it would take time to finish out the cycle (months... or years) and that no amount of rate slashing by Jackass or any other program would help. This, I would love to brag, was proven today as President Bush delivered a message to the press about a $145 billion "stimulus plan". As the speech began, the DOW was UP about 180 points. By the time the speech was over, the DOW was in negative territory and eventually closed down. It is pretty clear that the institutional money managers understand the limitations of governmental ability to force economic change.
We also received another "shoe drop" this week as Citigroup (C) wrote down a $20 billion loss, which turns out to be the largest loss in history for a bank. Also, large bond issuers are being investigated. Here are the nuts folks: the earnings reports and economic releases that have been coming out so far this year have been met with tags like "...hasn't been this bad since 2001" or "...our largest percentage drop since 2002".
Given the fundamental parallels to the 2001-02 and 1987 bear markets, the following are bad ideas:
1) Trying to pick a bottom.
2) Listening to Jim Cramer.
3) Watching CNBC.
4) Reading analyst reports.
Ignore all that shit. They are going to fill your head with "its at a great value now" and "we may have found a bottom". Yeah, just like $90, then $75, then $50, then $5 was a value for Enron. They tell you to buy the shit because they need someone to sell it to.
Next week, keep an eye on Legg Mason (LM), Myriad Genetics (MYGN). Both of them have created pretty strong levels of support ($68 and $44 respectively). They are also forming some text book descending triangles. Be patient. Wait for the break. Then short the shit out of 'em. Remember those gold (GDX, GLD) ideas as well.
Lastly, if you need A REASON TO NOT LISTEN TO ANALYSTS, I present: Harley Davidson (HOG).
DOW -515 (-4.09%)
S&P -77 (-5.5%)
NASDAQ -99 (-4.1%)
RUSSELL -31 (-4.5%)
THE STORY:
Last week I talked about the credit and housing problems that are taking quite a toll on the market. I also said that it would take time to finish out the cycle (months... or years) and that no amount of rate slashing by Jackass or any other program would help. This, I would love to brag, was proven today as President Bush delivered a message to the press about a $145 billion "stimulus plan". As the speech began, the DOW was UP about 180 points. By the time the speech was over, the DOW was in negative territory and eventually closed down. It is pretty clear that the institutional money managers understand the limitations of governmental ability to force economic change.
We also received another "shoe drop" this week as Citigroup (C) wrote down a $20 billion loss, which turns out to be the largest loss in history for a bank. Also, large bond issuers are being investigated. Here are the nuts folks: the earnings reports and economic releases that have been coming out so far this year have been met with tags like "...hasn't been this bad since 2001" or "...our largest percentage drop since 2002".
Given the fundamental parallels to the 2001-02 and 1987 bear markets, the following are bad ideas:
1) Trying to pick a bottom.
2) Listening to Jim Cramer.
3) Watching CNBC.
4) Reading analyst reports.
Ignore all that shit. They are going to fill your head with "its at a great value now" and "we may have found a bottom". Yeah, just like $90, then $75, then $50, then $5 was a value for Enron. They tell you to buy the shit because they need someone to sell it to.
Next week, keep an eye on Legg Mason (LM), Myriad Genetics (MYGN). Both of them have created pretty strong levels of support ($68 and $44 respectively). They are also forming some text book descending triangles. Be patient. Wait for the break. Then short the shit out of 'em. Remember those gold (GDX, GLD) ideas as well.
Lastly, if you need A REASON TO NOT LISTEN TO ANALYSTS, I present: Harley Davidson (HOG).
Friday, January 11, 2008
Market Wrap- 2008 Week 2
THE TAPE:
DOW -200 (-1.5%)
S&P -11 (-.75%)
NASDAQ -65 (-2.5)
RUSSELL -17 (-2.4)
THE STORY:
If I had been blogging for the last year, you would have seen some posts back in late Q1 that talked about the sub-prime story. There were smaller companies that were going bankrupt left and right (LEND, NEW). It then morphed into a monster story in the middle of Q3 when the sub-prime issue trickled UP to the big boys. Citigroup (C), Merrill Lynch (MER), Capital One (COF), JP Morgan (JPM), and Bank of America (BAC) have had capital equity losses ranging from 20-50% since July . Countrywide (CFC) has dropped about 80% in the same time frame. Between Q3 and today, we have been waiting for the "other shoe to drop." If you take a look, you can see an entire closet full of "other shoes" (the most recent being today's $15 BILLION write down by MER). The entire financial sector (XLF) has been hammered.
It seems like every week, there is another dip shit analyst that is talking about "further concern over the sup-prime and credit issues." Further concerns? These guys are complete assholes. The concerns started back in the beginning of 2007, and they will continue until the cycle runs its course. It isn't news worthy when another analyst wakes up and smells the bear market. The people who were stupid enough to buy a home way over their pay-grade, and the companies stupid enough to let them, will all have to try to dig themselves out of the grave. This will continue to have huge implications in the market.
Think about it for a moment. How would you dig yourself out of this situation? You bought a house and the payment fit your budget... barely. Then two years later, your rates are adjusted and your payment goes up by $800. You can't refinance because you already did that last year to pay for Christmas. You can't sell it because it has been devalued by $10k since the housing market dip. Where does the other $800 come from. It comes from your gym membership, your clothing fund, your video games, movies and music. It comes from the $50 per night restaurant you love so much. Forget about the renovation on the bathroom upstairs. What matters now is that you can STAY in the house... not fix it up.
Now take all of the money you aren't spending on those items and multiply it by 25 million people. We are talking about billions (if not trillions) of dollars that will not be going to Crocks Shoes (CROX), Lowes (LOW), and PF Changs (PFCB). Mix that in with Bernake making further inflationary decisions, and $100 oil (OIH), you have a dying market with no currency value. IT IS GOING TO TAKE SOME TIME (or Mexico is actually going to have to pay back the money we let them "borrow" over the last 65 years... whichever happens first).
The flight to quality continues to grow with gold (GLD, GDX) prices breaking $900 per ounce. This is an indicator that big money players are heading for cover. I am betting on $1000/oz by the beginning of Q2. Corporate write downs continue and consumer confidence numbers keep falling. If you are bullish on the market, stop it.
DOW -200 (-1.5%)
S&P -11 (-.75%)
NASDAQ -65 (-2.5)
RUSSELL -17 (-2.4)
THE STORY:
If I had been blogging for the last year, you would have seen some posts back in late Q1 that talked about the sub-prime story. There were smaller companies that were going bankrupt left and right (LEND, NEW). It then morphed into a monster story in the middle of Q3 when the sub-prime issue trickled UP to the big boys. Citigroup (C), Merrill Lynch (MER), Capital One (COF), JP Morgan (JPM), and Bank of America (BAC) have had capital equity losses ranging from 20-50% since July . Countrywide (CFC) has dropped about 80% in the same time frame. Between Q3 and today, we have been waiting for the "other shoe to drop." If you take a look, you can see an entire closet full of "other shoes" (the most recent being today's $15 BILLION write down by MER). The entire financial sector (XLF) has been hammered.
It seems like every week, there is another dip shit analyst that is talking about "further concern over the sup-prime and credit issues." Further concerns? These guys are complete assholes. The concerns started back in the beginning of 2007, and they will continue until the cycle runs its course. It isn't news worthy when another analyst wakes up and smells the bear market. The people who were stupid enough to buy a home way over their pay-grade, and the companies stupid enough to let them, will all have to try to dig themselves out of the grave. This will continue to have huge implications in the market.
Think about it for a moment. How would you dig yourself out of this situation? You bought a house and the payment fit your budget... barely. Then two years later, your rates are adjusted and your payment goes up by $800. You can't refinance because you already did that last year to pay for Christmas. You can't sell it because it has been devalued by $10k since the housing market dip. Where does the other $800 come from. It comes from your gym membership, your clothing fund, your video games, movies and music. It comes from the $50 per night restaurant you love so much. Forget about the renovation on the bathroom upstairs. What matters now is that you can STAY in the house... not fix it up.
Now take all of the money you aren't spending on those items and multiply it by 25 million people. We are talking about billions (if not trillions) of dollars that will not be going to Crocks Shoes (CROX), Lowes (LOW), and PF Changs (PFCB). Mix that in with Bernake making further inflationary decisions, and $100 oil (OIH), you have a dying market with no currency value. IT IS GOING TO TAKE SOME TIME (or Mexico is actually going to have to pay back the money we let them "borrow" over the last 65 years... whichever happens first).
The flight to quality continues to grow with gold (GLD, GDX) prices breaking $900 per ounce. This is an indicator that big money players are heading for cover. I am betting on $1000/oz by the beginning of Q2. Corporate write downs continue and consumer confidence numbers keep falling. If you are bullish on the market, stop it.
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