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Wednesday, September 29, 2010

trade - PBR

PBR looks interesting here. Looks like it wants to pop to around 39. It issues the largest equity stake in history, and was over subscribed. With that over hang out of the way, it may pop. If not, it should test 34 or so.

I will look to enter in the AM, and double up at 34.

Tuesday, September 28, 2010

a few thoughts... AOL, AAPL and IBM

AOL - I have been watching them closely for some time now, ever since Tom Armstrong and his team took over. They are smart and capable, and have made head way. With their purchase of Techcrunch I will not be able to escape them now. (I am an avid reader of The last few months have been bullishly stable. Its forward PE is 12-13, and if AD dollars are coming back, AOL's new strategy should be well positioned. Its potentially breaking out. I want to wait for a consolidation, then enter the name.

AAPL - Today was the day to take advantage. My trigger to sell, on pure technicals, is the red line of the weekly slow stoch to go over 80. We are not there yet, so I buy on weakness.

IBM - Talk about a 60deg angle :). Originally I wanted to wait until 137 to unload the remaining of my IBM shares. Why 137? No reason. Its purely arbitrary. But with the craziness this morning, I later unloaded in the strength. The position was too big of a winner to allow to give any of the gains back via a consolidation or pull back. (Similarly to what AAPL did, suddenly.)

I will begin to load up again on IBM on any pull back. If it sees 132-133, I will add aggressively. If it sees 130-131, I will be very overloaded in IBM.

ugly action explained

Consumer confidence number was lower than expected. Judging by the market action, plenty of big boys knew about it before the rest of the world.

Also did not help the market when former adviser to China's central bank, Yu Yongding, states US dollar is one step nearer to crisis. Although I take China's words on the dollar with a huge grain of salt, as I take Obama's (or any other US official) comments on the Chinese currency with a huge grain of salt.

Anyway, ever wanted to get into Apple? Close your eyes, hold your nose and jump right in. Cause now is the time.

weird action

Some fucked up things are going on right now. I could not get a clear picture, but something screwy just happened.

I do not sell any AAPL, but I did unload on F and some IBM to stock up on some cash.

I do not see a reason for the abrupt action. Could be a big-boy who has had enough, could be a mini-flash event... I don't know.

What I do know, when things consolidate, I will use the cash position to enter names I like.

Saturday, September 25, 2010

Market Thought... :)

Looks like my thesis is playing out. There should be some follow through next week to rise through the 1150 level.

I will look to take on some light protection next week to prep for some swing action due to the job number on Oct 8th. (We may see some 'anticipated' market weakness before the number is released.)

Also, while reviewing the videos via CNBC, I saw a set with Hedgie Big-Boy David Tepper. In a word, the guy projected a sense of awesomeness. Other than his cool persona (as he controlled that interview, not the other way around), I like the way he broke down his thesis. Its worth watching to see his thought process.

David Tepper 1
David Tepper 2

Friday, September 24, 2010

IBM has broken out

If there is any weakness in IBM going forward, it is a buying opportunity. It just broke out of its 11 month (that is 11 month) consolidation.

Its about time seeing how so many companies want to be just like them.

I had to take some profits in it (had to capture some gains), but it will approach 145 by year end. This is why I still have a nice position in it, and will add on a consolidation from this move.

Thursday, September 23, 2010

Market Thought... healthy

So we are seeing a pull back from the 1150 level, more so due to the Jobless Claims numbers this morning. The market will be approaching the 14 SMA.

I make no secret I am a fan of the current market, and this is the level I wanted to take advantage.
I will look to add to AAPL, IBM and GS today. The investment banks got hit thanks to Jefferies yesterday, but I think the sector was unfairly punished.
JEF trades at multiple almost twice that of GS. Even though JEF was taking share and in a strong position, their valuation merited a pull back. The big boys are already being discounted for the lost earnings. Their multiples are telling us this already. (Also, the analysts came out yesterday with their revised views due to JEF's earnings, so today the dust should be settling.)

Tuesday, September 21, 2010

Market Thought... interesting

First a few trading notes:

1. covered the market protection toward the end of the day.
2. repositioned AAPL calls from 250 to 270 Jan 2011. (basically it eases my exposure, while remaining very exposed, and gives me more cash on hand)

I thought the 10yr move was interesting today. The move caused the yield to decline, almost in lock step to the SMA resistance.

But what was more curious was that this was caused by the Fed. It is very evident when looking at the intra-day chart.

After 220pm it goes crazy. In my opinion because of the Fed intervention with the 10yr, it means very little to me now. I do not think it will signal the 'risk' trade is back on. (Before today, I was looking to it for that very reason.)

I also think this action is giving a false indication to the bond market in general.

But I am not a bond guy. I understand equities far better. Regardless of what happens, with out a double dip (and Buffett indicated there will not be one via his group of companies), equities are too inexpensive, and they will begin to normalize. I will not hesitate to add.

Monday, September 20, 2010

Market Thought... just the chart

A carry over from my intra-day post. Here is the SP500 chart that highlights the potential resistance around the 1150 level.

Obviously, the 1150 mark was barely a blimp in the move upward in mid-March. So an argument can be made that the 1150 point is erroneous.

Will it provide resistance? I do not know. After all, the market has a long way to go just to get back normal valuation levels.

I will take on light, day-trading, protection trades via SPY puts. Most likely close it out if the market sees intra-day weakness. But for the most part, looks like...

the slow and steady move upward has begun.

fyi... some action

(didn't have time to post this earlier)

Closed out the market protection, as the market lulled during the President's Town Hall Meeting. Also took some (i stress, 'some') profits in overweight names. (Still very exposed to the long side, and will not hesitate to re-enter those overweight positions if/when the the names consolidate with the market.)

I will re-enter market protection as the SP500 approaches 1150. (That is the next obvious resistance level w/respect to the longer-term rally dynamic.)

Technically the markets are overbought, but still very inexpensive.

Sunday, September 19, 2010

Market Thought... same thesis

My thesis still has not changed from previous market thought post 'infection point, maybe'. There are far too many indications that suggest the market needs to consolidate. Hence I did not close out any of my market protection. The SP500 continues to reflect this by dancing with its resistance.

However I strongly believe the market players are slowly realizing the fact that a double dip is not going to take place. With this very important fact descending upon them, they know the market multiple is too low. The multiple should be around 14-15. If we assume the estimate of $87 per share for the SP500 is accurate, then a 14-15 multiple puts the SP500 between 1218-to-1305. (For the record, based on the macro-economic environment I am seeing, after this consensus estimate was issued, I think it is too low.)

The market will rally to the weekly 200/320 SMA.

The one indication I really like, that suggests such a market realization by the big boys is the LQD (corporate bond fund, which I think is a mood for the bond market in general). It looks toppy, and wants to roll over. After it rolls over, that cash will be put to work within inexpensive multi-nationals with great balance sheets, steady earnings. (ie IBM, MSFT, AAPL, GOOG, GS, F... the list goes on-and-on.)

MF, C and AAPL (details)

Here is the detail surrounding the trades mentioned Friday:

1. MF - The fundies are improving, as per the last conference call, and when I saw the Press Release that they plan on hiring thousands of brokers I liked it. Corzine and his team are seasoned guys with plenty of connections. They will be hiring seasoned, money generating players that will directly impact the top and bottom line. I really liked the news. Been waiting on the chart to increase the position I sold off. Look how the stock action trends upward while the overbought condition of the Slow Stoch eases. To me, this consolidation while maintaining price action is bullish. So I bought back the position I sold off.

2. C - While the action in the XLF and JPM give me more of a mix signal, and suggest broader financials my push down before they march upward, the Citi chart is different. Citi looks to want to maintain its uptrend via its SMAs. C may lose this trend if it is hostage to the index movement. But if the market gets a pop due to a shift in sentiment from Obama, Citi should pop with it to 4.2 or higher.

3. AAPL - For the record, I would love AAPL to consolidate more (and I will not hesitate to add), but there are indications it might not. Or it will consolidate higher. On Friday we saw the initial resistance from the top end, and the resistance was not much. With a stable market, AAPL will keep charging higher. The weekly suggests it will move higher until the Red line of the Slow Stoch move well past 80, and chills there for a bit.

Friday, September 17, 2010


Entered C, added to MF and re-entered AAPL (off the day trade) for the trade upward.

Still maintaining my market protection, as I am waiting for the short term move downward. Charts and reasoning will be explained later. (All look interesting here, individually.)

Debating GS

GS looks interesting to me. Right now it is sitting on its 10SMA. If GS is about to enter a momentum rally, then now is the time to buy it. (I would do it via the Jan 140 calls)

When I think of the reason for GS to be entering a momentum rally, I can not realistically convince myself. So I do not think it is entering a momentum rally. As such, I will enter GS if it sees the 38 SMA, around 148 or so. Then I think it can push to 156ish.

(I can see it getting a big pop upward with a favorable exit of its proprietary trading arm.)

morning humor... at least for me

I'm looking through Politico this morning, as I always do, and found the combination of Title and Picture to be extremely humorous.

The title:

Ex-Aides Unload on O' Donnell

The Pic:

Anyone with a mind knee-deep in the gutter as mine will see the humor in this right away.
I just thought... oh Politico, since when are you guys trying to be the new Onion.
Stating to "unload on O' Donnell" with a picture of her happy, looking up with her mouth open. I mean, really... LOL.
I'm getting married soon, I need to stop thinking this way. (If only pigs could fly :)

Thursday, September 16, 2010

Market Thought... oh baby

Oracle and RIMM are whispering ever so seductively in our ear. Judging by the after-hours action, a lot of speculators/investors are getting turned on, and rightfully so, the numbers were impressive.

While this obviously translates well for market activity tomorrow, the SP500 (and many of the internals) are still at resistance levels. An interesting aspect of this market is that it is in a different trading dynamic than the summer. Looking at the SP 500 chart, as a stand alone, we are at obvious resistance levels.

But when the NASDAQ chart is correlated to the SP500, we see a different trading dynamic emerge.

The last two major resistance marks for both the Naz and SP500 were in mid June and early August. The NASDAQ clearly shows a breach from the 100SMA that was acting as resistance. Hence, we are entering a new trading dynamic.

Make no mistake, the 100SMA is still sloping downward. IMO, this means the recent run needs to consolidate a bit. It may just stay around the 200SMA or move toward 2250. This may translate to the SP500 to quickly retest 1100 or the 14SMA.

Basically, I am looking for a brief consolidation here, especially since it would be healthy after the run we just had. Then a new, more stable, bullish trading dynamic for the market. (I will not hesitate to act.)

Also, a side note:

When looking into Oracle's report, the one thing I kept thinking about was IBM. I kept thinking about how well ORCL was doing with its hardware, and could only imagine how that would translate to IBM. The reason being, IBM is the company ORCL wants to morph into, except IBM has been doing it for many more years. IBM released their major mainframe hardware refresh at the beginning of this quarter, and implemented their new financing that was designed to take more market share. This should translate beautifully to the bottom line this quarter. Also, in a recent interview IBM's CEO highlighted how HP is no longer a competitor and that ORCL will become one. Seeing how both IBM and ORCL leadership have publicly voiced their disdain for HP, I think HP will be the clear loser here. Two very smart and capable companies are going after a headless horseman. It is almost a death wish for HP.

Wednesday, September 15, 2010

Interesting action

There is resilience within the current dynamic. Looks like, for now anyway, the 150/200SMA levels are acting as support for the SP500.

What I also find interesting, IBM and AAPL are pretty resilient. This could be the start of a new trading dynamic for both stock. IBM to no longer test the low twenties, and maybe even surpass the 132 top end resistance. Likewise wtih AAPL, as I am getting the sense the momentum players are simply itching to play this puppy again.

Entered some AAPL while maintaining my market protection. Will not hesitate to add to AAPL on any pull back below 265.

I do not think IBM will pull back any more, but I have plenty of IBM.

(the goal is making me more focused)

Tuesday, September 14, 2010

Pondering a goal

Nothing new with respect to the market. Yesterday's thesis is still in play. (I did take the opportunity to add to the SP500 protection early afternoon.)

As I was driving home from work today, I realized I need to establish a market goal. Last week I posted a grammatically horrifying write up about having too much to do at the moment. Because of this, I think I allowed myself to miss opportunities. (IE missing the recent market short, not trading DNDN from the 35-36 level, not going long GS around 140, etc) These oversights were most likely facilitated by the way I measure my performance. With trading, I always measure myself on the day-to-day, and not on a structured goal. This facilitates to not take action on the actionable. (if that makes any sense at all)

I purposely do not have a target number because by having a target it may skew my judgement when to sell a position. It may lead to a very negative characteristic of not selling when I am suppose to, or hoping something develops verse trading off of the information I have.

There is no room in this game for a lack of discipline or 'hope' for something to happen.

With that said, the positive of having a very public goal is that it will allow me to focus my evening reviews, pay more attention and act.

So here it is...

Goal: A combined portfolio gain of 185% in 4 months. (Start Sept 15th, 2010-to-Jan 14th, 2011)

(I will still be very disciplined in my approach regarding the powder I utilize to maintain a level of flexibility.)

A move I am looking for...

If the market does correct, AAPL may see its 10SMA on the daily chart. If AAPL approaches high 250s/260, I will enter.

Monday, September 13, 2010

Market Thought... inflection point, maybe

(Had my Bachelor party this past weekend. Needless to say, I was preoccupied :)

Looking at the SP500 we can clearly see resistance areas, which merits some caution.

The multiple resistances include:
the 1130 level, the 150/200 SMA, the oscillators are fairly overbought. The weekly chart corroborates this as well.

The internals pretty much give the same picture across the board.

There is a clear a technical situation that merits some caution for a potential pull back. If we pull back, I think we test high 1080-1090.

The kicker, however, is Buffett's opinion. He sees no double dip. If the market starts to realize that there is no double dip we will move higher.

The market will move higher because the market multiple is TOO LOW! With no double dip, the SP500 should have a higher multiple than 12-13.

(Keep in mind, current 2011 SP500 earnings is around 87. Multi-nationals have been producing better than expected numbers, and Europe just increased their growth forecast today. Which means the 87 earnings number maybe too low.)

The market is still in a crazy place because a lot of people do not understand what is in front of their face. So some protection is merited, as I took some on today. But I will close it out fairly quickly if we get the decline to 1090

Thursday, September 9, 2010

Lack of posts... IBM, F and MF

Too many things going on all at once have taken a bit of a toll.

1. day job - Another reorganization took place. This reorganization puts me one step closer to my desired out come, getting a package. Unfortunately the situation places a lot of burden on me to train new individuals before I leave, and am relied upon too much for my knowledge base. Basically it leaves me little time to actively trade, and watch the market. (Hence the lack of intraday posts.)

2. wedding stuff - The date is rapidly approaching, and I find myself running around too much and stressing about things I never though I would give a rats ass about. I make time to review my charts and conduct my research, but I feel it is condensed. So much so, that in hind-sight, I see that I missed a few opportunities. It is quite frustrating.

None one ever thinks the accumulation of stresses gets to them, but when stepping back and looking back, it gets quite evident that it does.

Anyway, thats enough of the bitching. But I do see opportunities here, even with this run up.

1. IBM looks to want to approach 129-130, if not higher.

2. F - Placed a limit order for 11.70. May not get there, but I can not actively watch it to deduce an intraday bottom.

3. MF looks to want to retest 7.50 - 7.60. I really like this one longer term, but for a trade off the the high 6s, it may pull back to the low 7s after hitting the mid 7s. (Looking to sell at 7.55 and re-enter on a consolidation. The consolidation should be minimal, so if not a fan of trading, selling may not be worth it.)

Tuesday, September 7, 2010

Market Thought... internals

There are some interesting technical set-ups that developed with the market internals last week. Could indicate where we are going, at least early next week. For example: AAPL, IBM and GS all look sweet here, and suggest a continued push higher.

AAPL and IBM indicate they will test, at least, the low end of the high range. (265 for AAPL and 130-131 for IBM.) GS is at a resistance, but with their recent announcement to divest their prop. test a push higher via multiple expansion maybe in play.

There are many, many, more charts like this that suggest the SP500 will push higher. However, the market is still a bit crazy so I am actively trying not to be complacent. The craziness may continue until the Sept. Jobs numbers come out. (I think they will be good enough to continue the rise in the market.) In the mean time, I am looking for SPY Nov. put protection as the SP500 approaches 1116. (Keep in mind, I will cover it quickly if we get a major move downward, and will not hesitate to pick up names on weakness.)

Friday, September 3, 2010

Jobs report... nice

Really nice report on Jobs today. (Here is the break down.)

Total Private number of 67k was really good. The one thing I can see the bears tauting as negative is that the Temp. Employment was 16.8. But a preemptive counter argument, that was the case in June, then in July we saw a +100K private sector number. The high Temp. Help number may very well lead to a strong September number.

Also a key take away, Average Weekly Earnings rose again to $774.97

Looking back, when the Productivity number came out yesterday, it was negative, and seemed bad. But the sited reason was higher employment costs, which I initially thought should be a prelude to a decent jobs number in the future.

The markets have every reason to run up today.

(To be clear, the payroll is not gang busters, but it is very good in that it merits a higher multiple in the equities markets.)

Thursday, September 2, 2010

Market Thought... purely technical

When I look at this market I think it is disturbingly cheap, especially internationally exposed companies, but my opinion is worthless. (this video is worth a look regarding blue chip companies) So that leaves me with just the technicals.

Right now the daily chart indicate the SP500 can move to 1100 to 1125.

Then there is the weekly chart which suggests a move to 1116 or so.

Purely on the technical front, I will look to take on some protection at 1116-1125.

(Fundamentally I SOOO do NOT want to short, but the psychology of the market is just ridiculous.)


No doubt the job market looks weak via the macro perspective. But via the micro prospective I see a different picture.

I managed a group of 5 for a biotech manufacturing facility. In late May we were told the site, in particular, my department will be shutting down w/in a year.

3 of those individuals found another job within 2 months of the announcement. A fourth just gave me his resignation today. (He could have left sooner, but was selective with his desired employment.)

The fifth can leave, but is choosing to stay. I am also choosing to stay. (I am petitioning to get a package, so I will begin trading full time and start an investment partnership shortly thereafter.)

A few new people have come in to replace those that left.

Point is, my microcosm of the job market tells me experienced intelligent people are finding jobs. Hopefully this begins to translate to the macro environment sooner-than-later.

Wednesday, September 1, 2010

quick thought

Nice action today.

The last two mini-rallies indicates the weekly 28SMA was the SP500's resistance. Observing the valuations, sentiment and level of under investment we should get there again. (Personally I think we should breach the resistance and re-test 1200, but I will re-evaluate when it gets to the 28SMA of the weekly chart.)