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Tuesday, June 30, 2009

Market Thought... short-term, i don't know

With the market bounce, short-term the market is not giving a solid picture. At the moment it seems stressed, as the SP500 is getting overbought while other indicators are still oversold. Basically this tells me the market needs a solid reason to keep rising in order to remain bullish.

Fundamentally, I do not see where that extra juice will come from to breach the 950 resistance. (We need positive economic data points and good earnings.)

But mid-term, probably after the summer months, the SP500 may very well see the 1000 market.

I get this from a simple pattern... take a look at the previous rally, and its major support.

The 320 SMA is an obvious support, so it should act as a resistance point and where the SP500 will approach to. The SP500 just needs to overcome its first major selling hurdle of the 950 mark (of this rally) before it gets there.

In the mean time, I remain long PWR, BKE, BNI, JPM, FCX, SQM (although the corn report was an ouchy), and wished I was still in F. (I stated I would be easing, and some of my limit orders were achieved.)

The above names I plan on remaining long, in case we do breah 950 sooner, but if not will be looking to add names.

Monday, June 29, 2009

Market Thought... umpfff

When looking at the Naz it currently suggests it wants to retest its upper range of approx. high 1800s.

However, the SP 500 is in an interesting position. It bounced off the 880s support, and is trying to make it back to the 950 cap level. Its trying, but the SMA maybe holding it back.

Then we have the VIX. The Vix appears to be breaking down, and wanting to test the low 20s. This would suggest a retest of 950, and Naz 1890 level. However, it is oversold, and I hate assuming something will keep breaking down when it is too oversold. (its times like these I get cautious)

I know... I know... I hate it when I give mixed messages. But here is what I ultimately think this set up is saying... we may get some resistance here, but the Naz may lead us to retest the upper limits of this market rally.

I may trim some of my stocks at the upper limits, as we may need some help to breach this point... just too much selling at those levels. But I will maintain positions when retesting this go around.

Wednesday, June 24, 2009

I will be Rose Boy...

If that gets me the chance to meet, and have a few seconds with Megan Fox (yes, that is all i need lol ;)... I volunteer to be Rose Boy

Who is Rose Boy?

Tuesday, June 23, 2009

Market Thought... 850?

I keep seeing and hearing 850 is the SP500 support, and where the market will retrace to. Being able to understand charts and market psychology quite well, I have to say I have no freaking clue as to where these people are getting this number from. (Just like when the gurus were claiming 875 was top line resistance, which I very openly disputed.)

A review of the chart indicates there is some strong support around the current level.

The 62SMA is currently at hand, with a very real buying support within the current market dynamic. (yes, we are still in the same market dynamic we were in last week, prior to this correction)

Now, below this level, we got air. We have no real support from this previous rally to suggest any potential support. If the SP500 breaks the 880 support, a new support will have to be created.

Will 850 be the level to which buyers enter, creating a new support level? Maybe... but why 850?

If we break the current support, while being oversold, IMO, fundamentals may gauge new buyers. When things get too cheap to ignore, with the new mindset of stability, massive buyers will come in.

Unless the overall market will take its que from the Nasdaq, and wait for it to hit firmer support with a more oversold condition. At the moment it looks like it can test 1713 or so.

Whatever the case maybe, valuations have gotten a lot better since (very literally) two weeks ago.

Monday, June 22, 2009

Market Thought... the herd

I always get amazed at the herd mentality of the street. Last week was great, this week sucks balls. gotta luv it.

Wasn't oil suppose to go to 85 by year end? Aren't the banks suppose to triple in a year? I mean you had Denise Gartman on CNBC saying Alcoa (when around 12) it is going to be a $40-50 stock in three years, yet selling it out right today.

The more and more I trade, the more I see how predictive the herd becomes. Just tells me most of the players on the street are morons, and nothing more than lemmings to a few powerful news letter type folks.

Anyway... everyone now thinks its hammer time. The markets will keep going lower, until the market stops and then it will be the opposite. They are all momentum whores. (Yeah, I whore out too, but I say when i'm gonna whore out.)

Whatever. People forgot about the stimulus, people simply do not care... But I do. I will use these smucks, and be one step ahead.

I have not flinched. I have built a position. Will add to it if the market continues to collapse. (That is what happens when you sell into the whores' hype, you have the cash to calmly buy into their stupidity.)

Will indicate purchases when I do. But I am really interested to add to PBR (low 30s), FCX (high 30s), SQM (low 30s) among others. Mind you these will be double up positions for me, so those price tragets are conservative... tomorrow morning we should see a market decline facilitating lower prices, and that would be a great time for an initial entry on these names, assuming anyone is interested.

Can Individuals Sue AP and Media outlets?

With all the complaining the traditional media outlets are doing regarding bloggers and Youtube video uploaders piggy-backing off of their content, the Iranian situation is showcasing another interesting irony.

The media outlets are using content posted on free sites (the very sites they are trying to sue and prevent their content to go on) to report. So can the individuals posting on twitter, Youtube, etc sue the major media outlets, as the content of the individual is being used by major media outlets to profit?

I am glad the major outlets are spreading the word to highlight the Iranian situation, but you have to appreciate the magnitude of irony here.

Sunday, June 21, 2009

Market Thought... buyer

The market is no longer overbought, and it looks like buying was taking place as the SP500 approached the 900 level.

The SP500 is not overbought while around a 920 support level.

Then there is the VIX, which acted accordingly and retreated from the 50 SMA.

The VIX is approaching oversold territory, however the possibility for it breaking down looks real. A review of the VIX action from 1999 to 2003 indicates the VIX low to be around 20. I think it is very reasonable to expect this from the VIX, as stability continues in the financial markets.

To me, this means to be a buyer, and that is exactly what I was/am doing. (as indicated through my previous post)

Make no mistake, the SP500 may very well test the 62SMA. But if it does, I will utilize the majority of my cash to purchase stocks

Wednesday, June 17, 2009

Trades - PBR, USO

Got my 40 price on PBR, and closed out the short on USO.

Currently my trades are the following...

1. F
2. BKE
3. SQM
4. PWR
5. FCX
6. BNI
7. JPM
8. PBR
9. UNG

Will not hesitate to double up once I feel the market is at its support... Also looking to enter FXI, AAPL calls and ITRI.

Tuesday, June 16, 2009

Market Thought... L.U.V... W... aahhh :)

Pick a letter... any letter, and define the economy or market via that letter. So there, now your an economist. :)

So the market went down today... so what. IMO, its a good buying opportunity for some stocks. The 950 cap on the SP500 started to break yesterday, and confirmed today.

Economically we have stabilized, and the Baltic dry index is still showing signs of activity, and does not merit much fear from this current market consolidation.

The market broke a light support area around the 920 level, but I can care less. I believe the real support is between 900 and 920, especially with the 62 SMA approaching the 900 level.

I was very much cash heavy around 950, made no secret of it as I was acting nimble, and waiting for names to come so I can put cash back to work. This consolidation is allowing me to do that.

Now I am no genius, but if I am thinking of this, then you can bet your ass some of the big boys that missed this rally are thinking of this.

Also, a look at the VIX indicates the fear level is becoming a bit over done, with respect to the current level of market stability. There is some room to move up here, which would indicate the market would go down, but the real resistance is between 33-36. The possibility for the vix to rise above 36 and to 40 is present, but, IMO, not likely. Adding support to the market in the low 900s.

Charting the Trades

Here are a few charts, and the reason I got back into BNI, PWR and SQM at today's levels.

First... short Oil and long Nat Gas. I plan on covering the trade when the ratio is about 15, so says the chart.

The 50 SMA, and the surrounding area (low 15), looks to want to act as support. This would suggest Nat. Gas to move toward high 4s/low 5s, and Crude to move to high 60s.

Individual charts suggest the same...

A look at the charts of BNI, PWR and SQM indicate, IMO, to be a good initial entry.

Monday, June 15, 2009

Trades - BNI, PWR, SQM

Managed to get my limit orders filled on BNI, PWR and SQM... will post the charts later in the day (as time does not permit at the moment)

BNI at low 73
PWR at low 23
SQM at mid/high 36

I consider them initial positions, but if they go up from here I may look to unload if profits tell me to.

(still short oil and long nat.gas)

Saturday, June 13, 2009


GOOG and AAPL look interesting here, however they have been notable laggers the past few days. (even though I indicated to short GOOG just prior to the lagging, was not expecting such a lag in relation to the market)


I was tempted to get in on Friday via 420 Dec calls, but its just not as oversold as I would like it to be. And it could be facing added pressure due to the performance of 'bing', which may allow GOOG to see the low 400s.

Then there is AAPL, with a similar chart scenario...
AAPL looks more appealing here especially with their command of the mobile market. Will probably enter via 135 Oct calls on Monday. Would preferably like to get the calls when AAPL is around 133 or so.

Friday, June 12, 2009

Trade - BKE

Entered a nimble position in BKE. As indicated earlier I think they are one of the better retailers, and march to their own beat. (I am not a fan of general retail right now, as I know many are not.)

This is a trade to pop off of its very oversold position. Once a consolidation upward takes place, I will most likely take profits. Looking for a 6-8% short-term move.

Thursday, June 11, 2009


When I see commentary like this... article... (from Cramer) justifying a new normal I get annoyed. This is not a new normal. Its called stagflation or manipulation. (close your eyes and pick which one you want to call it because whatever you want to call it, it will have the same effect on the economy)

Whenever prices go up its because of too many dollars chasing too few goods.

Copper production increase are not taking place, as per the largest copper miner in the world FCX's CEO, because China is the only one truly buying. So basically only one country caused the rise of copper to go up 61% since March.

That to me is bullshit.

CEO's can claim low demand, not increase production, while dollars are obviously chasing their goods (ie demand is present), causing the commodity to rise.

Then when the global economy picks up, the story will be... production can not meet demand, hence, too many dollar are still chasing too few goods. Prices keep rising.


So... are we in stagflation or just manipulation? Doesn't matter, the effects of higher input costs will be felt regardless, and ultimately be passed onto the consumer.

Wednesday, June 10, 2009

Still short the USO

I'm staring down Goldman, and calling their bluff. F- them to call on 85 oil in the heart of a recession while we are swimming with inventory

Keeping in mind I am also long NatGas (to also play the contraction in ratio of oil:natgas that should take place) and PBR (as it was sitting on support and oil above 60 for PBR is really good). I guess these can be viewed as a hedge too.

But as far as backing away from the oil play, i say, f-u GS ;)

Will look to add to the short USO (via oct puts) and long UNG (via shares in the ETF) when/if oil hits 75. (I'm sure GS can arrange it for me)

Monday, June 8, 2009

Market Thought... boring

Boring maybe the 'summer normal', as the market consolidates the massive move. I do not see any major pullback wanting to take place, but I just do not see solid upside from here either. The charts are not giving any particular 'tell' in direction, but the 950 (on the SP500) is currently a cap.

All-and-all, I am very overweight cash and simply waiting. I still have my previously disclosed trades...

1. short USO (although Goldman is not making that any easier :)
2. long UNG (the added benefit of the 18-to-1 ratio divergence in NatGas and Oil adds to 1 and 2)
3. long F
4. long SQM
5. got some PBR today, earlier in the day

I like PBR simply because of its technical set up. It is sitting on potential light buying support, however it has a good chance of testing 40 if Oil does go to 63. I will add around 40.

I am patiently waiting for a few things...

1. JPM around mid 33
2. FCX around mid 52
3. SQM if it breaks to 34
4. AAPL around 132-135
5. GOOG around 425
6. BNI around 73
among others.

One I really like at the moment, just waiting for the markets to subside more, is BKE. If anyone is interested in retail, BKE imo, is one of the best.

FYI... ad sense

I put on GOOG Ad Sense... don't expect to make anything from the ads, but primarily activated it to keep track of site hits and what not.

As my previous disclaimer claimed... 'the site is not popular enough...' to make any money from ads... that is why I trade ;)

Happy Trading.

Thursday, June 4, 2009

Trade - GOOG

Looking to short GOOG for a consolidation trade. It is very overbought, and has had too many up days in a row.

An analyst already raised target estimates, and more should follow due to the absolute bullishness, adding support to the stock.

Will look to take the trade on tomorrow if GOOG raises via 450 Sept puts, but am only playing it for a few point pull back.

Market Thought... nimble

Such extremes going on in this market at the moment, but I really do not know why. Here are some of the reasons I have read or heard about...

A case for the market to keep rallying:

1. Markets will keep going up (melt up) because of institutional investors needing to not lag the benchmarks. (IMO, this is bullshit, but okay... since I am not a Wall Street guy I guess I have to accept this for the potential of what it can mean.)

2. Dollar keeps declining (or currencies globally collapse) so markets will rise. (A function of economic math. I happen to think a global currency collapse will start WW3, and is the absolute worst thing that can happen, as there is very little fiscal medicine to alleviate such a wide scale collapse.)

3. Earnings growth is coming back. (Utter bullshit. Earnings growth was a function of cost cutting. Revenue growth is needed for a sustainable bull market, and we are simply not there.)

A case for market head winds:

1. This rally is being fueled by inventory replenishing. After inventories are built up, what will be the driver of growth with the consumer still loosing jobs and the savings rate up to a 14 year high? (a strong case for a sideways market)

2. Inflation gets out of control, the Fed and Gov, will utilize their tool by quickly raising rates and increasing taxes. (IMO, this takes care of the potential currency collapse, but the market is also a function of interest rates... the market is not so nicely valued if 10yrs Notes are yielding 7%)

Because at this stage of the game and the market's already massive move, I continue to be nimble. Short-term (pseudo day) trading where I can, but overall I have no real conviction here. Unfortunately I am a sucker for fundamentals, but luckily I trade on technicals.

At the moment, the current trades I have going...

1. short oil via the USO. Will cover it when crude sees around 63

2. Long Nat Gas via UNG (will close it at 17-18)

3. took on a position in SQM (will close it with a 5-8% move upward, its overbought but signs that it may get more overbought tomorrow... also would not mind holding this one for the long-term... great ag and Lithium play.)

4. F... was able to get it at 5.98, and it may breach its mid 6 resistance as it gets more overbought. Will close it with its strong burst through that resistance point, assuming it breaks.

ITRI... sneaky buggers

Apparently investors can not do math or my math is completely wrong. The ITRI press release indicated 3,162,500 total shares were issued netting $160,623,375. Coincidentally they did not do the math for us, and did not provide a per share value.

Dividing one # with the other I get a $50.79 share offering. Yet the market has completely ignored this huge discount. I mean... seriously... ITRI offered their shares at a market discount of 13-15%!!!!

Interesting... But I'll wait until ITRI approaches 52-55.

Monday, June 1, 2009

Shorting Oil via USO

I was going to wait to short oil until Wed morning, but then I came across this article today (article) which stated China will increase gasoline and diesel prices approximately 19cent per gallon today. That's huge.

On top of that I read another article, which give a very nice picture of US gasoline demand destruction when prices went too high. (Pretty much putting hard data to my fears of the high price in gasoline.)

Then I read that the oil in the Kurdish part of Iraq has started to flow. Even more supply to a world that is currently neck high in what it can handle via inventory. (article)

If I were in crude right now, or still in oil stocks, I would take a hard look at selling them in this strength, and wait for a pull back.

Crude has broken from fundamentals, and it has become a pure momentum play at the moment. (ie short candidate) The technicals are indicating a very much over bought condition needing to consolidate the move.

I will be looking to short it today for a decline to its consolidation (low 60s). While I would love to see Oil decline to $50/barrel, I am not expecting the momentum to simply stop unless the equity markets decide to break down.

Oh Baby...

Breakouts galore!!!! And you can bet your ass I'm a seller into this strength.

I am pretty much all but out of the market for the moment, and waiting on opportunities. I currently still have UNG (as I view it a special situation, and F can be viewed as such), but as inidcated earlier will not hesitate to sell at 17-18.

Barring special situations, we are still in the worst recession in 80years, and revenue growth is simply not there. Hence stocks do not merit high multiples at the moment.

So I took profits, and am waiting for trading opportunities to arise. (And they arise every day for a trader so I do not fear missing any potential rally.)

I simply can not justify not walking away from these type of gains.