I apologize for slacking off on my writing time over the past two months but I went from no work to way too much work in a very short amount of time. Went from 10 hours a week of work to over 70 hours a week. While I do appreciate it, I do not have much time for the extra-curricular activities such as blogging. And even sadder, I have made 4 trades in the last 6 weeks. 4. That is less than the number of fingers on a hand. Sad, but at the same time, lost very little money to my broker. :)
Where are my thoughts these days? Still watching the VIX. While I can't see it ever getting back up in the 40-50 range in the next 6 or more years, I think we will be hover in the 25-30 range for a very long time which is a much higher number than historically it is used to. It means we should expect unexpected wild swings in the market coming up and it will all be news driven.
What was interesting about the fall in the market earlier this week is that there was not follow through. On Monday, I expected that perhaps some panic would hit the market and the fall under 990 would be followed soon by 980 and 970 rather quickly. Yet the market had a decent close on Monday considering the poor day and has been up 3 days straight since then. Resilient for sure.
I am bullish (yes, bullish) on energy. Energy stocks may be the leader for the next 12 months. Natural Gas is going to be one of the leaders in this sector long term. Probably right behind solar. I don't think Oil will be a leader due to reduced dependency on oil and less demand.
I think financials will be flat for the next 12 months at best. This should provide a very nice opportunity for traders to be short FAS and FAZ. Both should deteriorate over time and should provide pretty easy money.
Tech should outpace other industries which is not to say tech will be up, but it will be less down than other sectors.
As I told many for a long time, I think the presumption that the P2 wave was over or near over was just a wish and dream that was way too early. Primary waves take many many months if not years. a 6 month Primary wave was a total dream. That said, I still would not be long this market in general. But there are pockets out there to pick out.
I like Gold, Energy and I hate regional banks still (KRE). I think Tech will be dead money for awhile (until Holiday season).
OK, hopefully I will post more than once a month but I am seriously bogged down and haven't been keeping up with things lately.
Friday, August 21, 2009
Thursday, August 6, 2009
SRS: Primed for a bounce
I am not a big fan of SRS, especially for long term plays due to getting burned in the past but if there is ever a time to play SRS, now is it. The leveraging mechanisms for this ETF can cause a large percentage increase if there are any corrections in the market around REIT's and CRE exposed smaller financial institutions.
I have to pound the table on this one. SRS could see a 40% increase in the very short term. But don't hold it too long. You have to take your profits in these leveraged ETF's when you can. Don't get greedy.
The only leveraged ETF I can recommend that does not appear to have nearly the time decay as others is SDS. But again, not as a long term play.
Another great play right now would be to short or play puts on FAS. It has had quite a run up and any correction in financials will cause a pretty big correction in this triple leveraged ETF.
I have to pound the table on this one. SRS could see a 40% increase in the very short term. But don't hold it too long. You have to take your profits in these leveraged ETF's when you can. Don't get greedy.
The only leveraged ETF I can recommend that does not appear to have nearly the time decay as others is SDS. But again, not as a long term play.
Another great play right now would be to short or play puts on FAS. It has had quite a run up and any correction in financials will cause a pretty big correction in this triple leveraged ETF.
Tuesday, August 4, 2009
PULL!
It's time. Finally a spot to pull the trigger on some short positions. I was stopped out early on shorting AmEx and KRE. Stayed out of the market other than playing TBT and UNG. But now is the time to enter short positions. I base this on technicals of charts as well as reality that the market is overbought in a difficult economy. I think we go back to test 930 before a bounce brings us back to the upper '900's. We will see.
On the positive front, I am running into people who are openly spending money. Installing a pool, buying cars, upgrading the house, etc. At the same time, many friends and family who have been out of work still are. Some have been out of work for more than 10 months. Sooner or later this will catch up the economy. I feel like this is a period of false hope and in the end, many will get burned by over spending or being complacent.
Tech is on fire. I won't touch it either way. It really needs to correct but I won't get in front of that train. You have to have some sort of inflation trade. TBT or GLD have got to be in your portfolio. I still like nat gas plays as a long term play but if you are not keeping up with what the gov't is trying to do with futures activity around energy, well, all I can say is playing UNG is risky at best since it may not be able to track to future prices anymore.
On the positive front, I am running into people who are openly spending money. Installing a pool, buying cars, upgrading the house, etc. At the same time, many friends and family who have been out of work still are. Some have been out of work for more than 10 months. Sooner or later this will catch up the economy. I feel like this is a period of false hope and in the end, many will get burned by over spending or being complacent.
Tech is on fire. I won't touch it either way. It really needs to correct but I won't get in front of that train. You have to have some sort of inflation trade. TBT or GLD have got to be in your portfolio. I still like nat gas plays as a long term play but if you are not keeping up with what the gov't is trying to do with futures activity around energy, well, all I can say is playing UNG is risky at best since it may not be able to track to future prices anymore.
Wednesday, July 29, 2009
The Rumors of My Demise...
No, I am not dead. Still hear, still kicking, but have been sitting and waiting, not chasing the run up and not trying to time the top. Instead, waiting for indications that the market is tiring or the market is clearly going higher.
I think we have had a decent signal over the last couple of days that the market is tired. Economists are coming out and saying, while beating earnings is good, top line numbers are not good and the potential for growth is low. We can not have a jobless recovery. Not only that, but the lack of growth in the U.S. will have adverse effects in emerging markets which has been the trendy thing to invest in and talk about.
The U.S. markets have always been the leading indicator of where things are headed in the short term. But perhaps that trend is changing. Last night, China's markets had a big correction. It was not due to the U.S. markets. It was due to China equities being over bought. The market corrected. And I have a feeling the U.S. markets will follow. Perhaps this is a new trend we will begin to see.
The other indicator is the SPX appears to show technical signs that a reversal is coming with a doji cross being formed yesterday. Well, not only that but it got way ahead of its 20 and 50 day ma's. We have to expect the SPX will touch the 20 day ma before it will bounce back and move higher so we are looking at an SPX in the 930 range then we will see what the bounce looks like.
The VIX is showing some strength albeit relative strength. It is still week and indicates that the market is settling down. Even the move up the last few days has been relative small, it is moving closer to its 20 and 50 day ma's which I expect it will pass without much resistance assuming there is a correction in the market.
The market is not only due for a move back, it is fundamentally necessary given the poor top line numbers in the earnings this quarter. Investors are betting on stocks which are showing negative growth but since they are beating the bottom line, I guess it gives them hope. We should see two more quarters of improved bottom line numbers only because last years numbers were so bad. But top line numbers have got to grow in order for stocks to justify their current lofty evaluations given the economic climate.
I think we have had a decent signal over the last couple of days that the market is tired. Economists are coming out and saying, while beating earnings is good, top line numbers are not good and the potential for growth is low. We can not have a jobless recovery. Not only that, but the lack of growth in the U.S. will have adverse effects in emerging markets which has been the trendy thing to invest in and talk about.
The U.S. markets have always been the leading indicator of where things are headed in the short term. But perhaps that trend is changing. Last night, China's markets had a big correction. It was not due to the U.S. markets. It was due to China equities being over bought. The market corrected. And I have a feeling the U.S. markets will follow. Perhaps this is a new trend we will begin to see.
The other indicator is the SPX appears to show technical signs that a reversal is coming with a doji cross being formed yesterday. Well, not only that but it got way ahead of its 20 and 50 day ma's. We have to expect the SPX will touch the 20 day ma before it will bounce back and move higher so we are looking at an SPX in the 930 range then we will see what the bounce looks like.
The VIX is showing some strength albeit relative strength. It is still week and indicates that the market is settling down. Even the move up the last few days has been relative small, it is moving closer to its 20 and 50 day ma's which I expect it will pass without much resistance assuming there is a correction in the market.
The market is not only due for a move back, it is fundamentally necessary given the poor top line numbers in the earnings this quarter. Investors are betting on stocks which are showing negative growth but since they are beating the bottom line, I guess it gives them hope. We should see two more quarters of improved bottom line numbers only because last years numbers were so bad. But top line numbers have got to grow in order for stocks to justify their current lofty evaluations given the economic climate.
Thursday, July 23, 2009
On the Bench
You may have been wondering why I have not been posting much. Well, that is because I am basically on the sidelines waiting for the dust to settle. I do have a position in TBT, UNG and short KRE. Other than that, the waters are too dangerous here. Can't play short with the technicals clearly indicating a strong market right now. That will change, and soon, but we could see a 990 s&p before that happens.
May be time to move out some long positions from college funds and 401K's. Earnings reports are good on the bottom line but I am not impressed with top line numbers. Commercial RE will be the target after the dust settles. That means, short KRE, playing SRS on a trading basis, and trading some regional banks such as Regions, SunTrust, BB&T, etc.
VIX is very week, so another indication you can't put a lot on the short side right now. Too late to play long. good luck
May be time to move out some long positions from college funds and 401K's. Earnings reports are good on the bottom line but I am not impressed with top line numbers. Commercial RE will be the target after the dust settles. That means, short KRE, playing SRS on a trading basis, and trading some regional banks such as Regions, SunTrust, BB&T, etc.
VIX is very week, so another indication you can't put a lot on the short side right now. Too late to play long. good luck
Friday, July 17, 2009
The Spin on Dr. Death
Did anyone catch the spin machines churning on the Nouriel Roubini comments today? I found it fascinating. Just before 2pm, CNBC reported that Roubini said the worst is behind us and we will have a recovery this year. The market clearly reacted to this news as it tracked up steadily into the close after the report.
And CNBC continued to bring up this news every 10 or 15 minutes. They could not let it go, using it as a catalyst for pumping the market.
But, around 5:20pm, CNBC had a breaking news story where they reported Roubini claims he did not say what was being reported and it was taken out of context. He continues to believe we will have a struggling economy and if there is a recovery, it will be slow and small.
What I found fascinating was all the CNBC talking heads who just a few minutes before were claiming how important Roubini's comments were, were now saying Roubini's comments/thoughts are insignificant. Kind of funny to watch the bulltard reporters back track everything they had said all day.
Now, to be fair, when Roubini's comments were reported just before 2pm, the bears were coming out and saying Roubini's comments were not important. And when the retractment report came out after 5pm, the bears came out in droves to say, Roubini really knows his stuff.
It's all a manipulation game and you have to expect the unexpected. The market will always lean toward optimism so spinning news to the optimistic side is an easy way to move the market up.
Notes:
And speaking of that, after the bell GOOG reported earnings and things were not as good as expected. But notice Jim Goldman's report on GOOG went through 4 minutes of positive comments and then mentioned in the last 10 seconds that they numbers were below expectation causing the stock to move down after hours. Goldman did his best being a spin master but it didn't work. Perhaps investors (even after-hours investors) are brighter than I give them.
AXP is defying gravity. I got stopped out early today and I was surprised it happened. But you gotta set stops and take your loses when you know you are beat.
I have not been reporting on the VIX lately because... well, not much to report other than it is retesting its recent lows. It could be a sign of stability in the market. I still think this is a head fake and when bulls start to really jump in, all hell will break loose.
Tech could save the day but eventually the housing price crash, commercial RE, unemployment and dismal retail will catch up and be reflected in stock prices across the board. Regional banks will crash before the end of the year. The big guys will survive due to gov't aid, but CIT Group shows us that the gov't is not interested in saving all of the banks.
And CNBC continued to bring up this news every 10 or 15 minutes. They could not let it go, using it as a catalyst for pumping the market.
But, around 5:20pm, CNBC had a breaking news story where they reported Roubini claims he did not say what was being reported and it was taken out of context. He continues to believe we will have a struggling economy and if there is a recovery, it will be slow and small.
What I found fascinating was all the CNBC talking heads who just a few minutes before were claiming how important Roubini's comments were, were now saying Roubini's comments/thoughts are insignificant. Kind of funny to watch the bulltard reporters back track everything they had said all day.
Now, to be fair, when Roubini's comments were reported just before 2pm, the bears were coming out and saying Roubini's comments were not important. And when the retractment report came out after 5pm, the bears came out in droves to say, Roubini really knows his stuff.
It's all a manipulation game and you have to expect the unexpected. The market will always lean toward optimism so spinning news to the optimistic side is an easy way to move the market up.
Notes:
And speaking of that, after the bell GOOG reported earnings and things were not as good as expected. But notice Jim Goldman's report on GOOG went through 4 minutes of positive comments and then mentioned in the last 10 seconds that they numbers were below expectation causing the stock to move down after hours. Goldman did his best being a spin master but it didn't work. Perhaps investors (even after-hours investors) are brighter than I give them.
AXP is defying gravity. I got stopped out early today and I was surprised it happened. But you gotta set stops and take your loses when you know you are beat.
I have not been reporting on the VIX lately because... well, not much to report other than it is retesting its recent lows. It could be a sign of stability in the market. I still think this is a head fake and when bulls start to really jump in, all hell will break loose.
Tech could save the day but eventually the housing price crash, commercial RE, unemployment and dismal retail will catch up and be reflected in stock prices across the board. Regional banks will crash before the end of the year. The big guys will survive due to gov't aid, but CIT Group shows us that the gov't is not interested in saving all of the banks.
Thursday, July 16, 2009
Housing Costs are Higher???
First, sorry for not posting as much. Very busy with projects at the house and determining my next career move which may be rejoining my old company who needs me back. A few options so its no sweat. I never even had to stand in an unemployment line.
Anyways, the market is really showing signs of strength based on earnings and ... economic data? Yes, it is gaining on economic data showing that the economy is improving, or so we are told. Lets take one piece of data. CPI. This gives an indication of weather we are moving into inflationary or deflationary territory or if things are stabilizing. This is a number that the government calculates based on a wide range of data points. One of them is housing or rent costs. Basically, how much does it cost you to live where you live. And according to the CPI data, housing costs went up in Q2 relative to Q2 2008??? Say what? Yep, even with house prices plummeting and everyone and their brothers are refi'ing, in order to reduce monthly payments, the government is telling us we are paying more for housing now than we were last year.
Talk about totally discrediting this once thought of important data point. This proves you can not trust any of the numbers coming from the government. This is nothing more than trying to stimulate the economy by cooking the books. It may work, but how can we trust anything that the government is telling us.
Another piece of data. The Fed released it's meeting notes and in them, it said they expect unemployment to reach 9.7% this year and 8.8% next year. Are they all living in a cave? we will hit 9.7% within a month and 10% by October. Next year, unemployment is not going down unless they stop counting those who have been unemployed for more than 6 months and are no longer eligible for unemployment.
So, let the market run. Tech is doing well and big banks should do well. Healthcare may do well. Outside of that, retail, real estate, consumer discretionary, are all going to get hit hard once the real data comes out. It may not be until August until that happens.
Remember, just a few days ago the market was in the 870 range and all the TV analysts who were targeting a move to 850 or lower are now saying 950 or higher. It all changes quickly in an environment like this. don't fall in love with a trend. In this market, the trend may be your enemy, not your friend.
Notes:
As pointed out TBT was a steal. Should continue to climb to the 55-56 range.
UNG is starting to look tasty again at these levels for a long term play. I like Oct and Dec calls. Nat Gas is at historic lows and could easily double by end of year.
I like AXP as a short position big time once this rally looses momentum. AXP is a dog and they can continue to cut jobs to offset loses and fool the investor but sooner or later, that will bite them.
Wow, look at SRS. I bought at 20.30, sold at 23.10 and bought back in today right at 19.00. Its a great play to swing with this one. Don't fall in love with it though as we have learned in the past. Take that 15% gain and be happy.
Anyways, the market is really showing signs of strength based on earnings and ... economic data? Yes, it is gaining on economic data showing that the economy is improving, or so we are told. Lets take one piece of data. CPI. This gives an indication of weather we are moving into inflationary or deflationary territory or if things are stabilizing. This is a number that the government calculates based on a wide range of data points. One of them is housing or rent costs. Basically, how much does it cost you to live where you live. And according to the CPI data, housing costs went up in Q2 relative to Q2 2008??? Say what? Yep, even with house prices plummeting and everyone and their brothers are refi'ing, in order to reduce monthly payments, the government is telling us we are paying more for housing now than we were last year.
Talk about totally discrediting this once thought of important data point. This proves you can not trust any of the numbers coming from the government. This is nothing more than trying to stimulate the economy by cooking the books. It may work, but how can we trust anything that the government is telling us.
Another piece of data. The Fed released it's meeting notes and in them, it said they expect unemployment to reach 9.7% this year and 8.8% next year. Are they all living in a cave? we will hit 9.7% within a month and 10% by October. Next year, unemployment is not going down unless they stop counting those who have been unemployed for more than 6 months and are no longer eligible for unemployment.
So, let the market run. Tech is doing well and big banks should do well. Healthcare may do well. Outside of that, retail, real estate, consumer discretionary, are all going to get hit hard once the real data comes out. It may not be until August until that happens.
Remember, just a few days ago the market was in the 870 range and all the TV analysts who were targeting a move to 850 or lower are now saying 950 or higher. It all changes quickly in an environment like this. don't fall in love with a trend. In this market, the trend may be your enemy, not your friend.
Notes:
As pointed out TBT was a steal. Should continue to climb to the 55-56 range.
UNG is starting to look tasty again at these levels for a long term play. I like Oct and Dec calls. Nat Gas is at historic lows and could easily double by end of year.
I like AXP as a short position big time once this rally looses momentum. AXP is a dog and they can continue to cut jobs to offset loses and fool the investor but sooner or later, that will bite them.
Wow, look at SRS. I bought at 20.30, sold at 23.10 and bought back in today right at 19.00. Its a great play to swing with this one. Don't fall in love with it though as we have learned in the past. Take that 15% gain and be happy.
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