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Thursday, March 31, 2011

AXPW.ob reports

The PR sums up Axion Power very very well.  Here is what must be read, if you are an AXPW.ob investor: (Its about 90% of the PR :)

...this Spring we will be turning out negative electrodes of consistent quality sufficient to begin the production of PbC batteries in quantities that will satisfy our customers."

The Company's vision for 2011 is to launch commercial quantities of PbC batteries through its growing network of strategic development partnerships.  That includes the Company's work with Norfolk Southern (NS), a Tier One US railroad with a leadership position in clean operations. Granville continued, "The third major achievement of 2010 was solidifying our relationship with NS.  We have been working with them for more than a year but have made real progress in the last several months. We have been told that we will receive an order from NS, in early April, for the purchase of PbC batteries for large 'string testing' which will result in profitable revenue when the anticipated transaction occurs in the second quarter of 2011. The string testing will be used by NS to duplicate the results that we have achieved here at Axion and the specific testing regimen will focus on how the PbC battery's longer cycle life and high rate of charge acceptance can best be utilized in the NS locomotive's use profile."

Additionally, the Company has continued to pursue and build relationships with numerous worldwide vehicle manufacturing leaders such as BMW.  The Company believes that micro and mild hybrid vehicles will help auto makers around the world meet their carbon emissions requirements, and will also enable the automakers to provide increased miles per gallon to the consumer. The Company believes the low-cost, high-charge acceptance PbC battery will be a contending preferred battery choice for this emerging "vehicle hybridization" market. 

Granville continued, "The recent events in Japan have brought home in a forceful way the need to integrate renewable and sustainable energy into our lives. If we want to increase the share of solar, wind, tidal and other forms of renewable energy, we will need a distributed power grid that can supply and accept power from a wide variety of sources.  One of the enabling technologies for such a grid will be affordable energy storage that allows one to hold energy generated when grid demand is low and utilize it in times of need or when demand is high. We believe PbC batteries will be an important part of the solution for bringing renewables to their proper place in our energy mix. We feel our proprietary PowerCube™ product, complete with batteries, with a battery management system, with remote monitoring and balancing capabilities, with all necessary integrated electronics, etc., is well suited to respond to on grid, and off grid, power demands such as UPS-back up; power smoothing; and power quality – to name a few. Our new onsite PowerCube project, which will be commissioned in early summer, will demonstrate some of these capabilities."

Axion Power has continued its work with various governmental groups and agencies in developing its PowerCube line of products for distributed energy storage under a grant from the Commonwealth of Pennsylvania; and a grant from the DOD through the Office of Naval Research for the development of standby power for the Navy and Marine Corps Silent Watch Program and their Assault Vehicle Program. It is the Company's objective to complete these projects in 2011.

In closing Granville said, "we have strengthened our team considerably with numerous important appointments in 2010.  We believe we now have a team that can take us where we need to go, and take us there effectively. We have spent considerable investment in updating our battery manufacturing plant at the Clover Lane facility to mesh with our new robotic electrode manufacturing equipment being installed at our Greenridge Road facility. There's still work to be done, there's always work to be done, but most of the important pieces are in place. We're ready, we're so ready." 

2011 is shaping up to be a very interesting year.

Wednesday, March 30, 2011

re-assessing AAPL

Now that analysts are revising their numbers, lets put things in perspective.  The last 4 quarters AAPL had earnings of: 6.43, 4.64, 3.51 and 3.33.  This coming quarter, despite the downgrade, the 3.33eps will be replaced with the March 2011 earnings, where estimates are currently 5.30.

AAPL historically trades with a trailing PE between 19-21.  With the March quarter factored in and a trailing PE of 19, AAPL will have a stock price of 377. (see forward PE under 'links')

This can be done for the following quarter. Currently, the June quarter is 5.28. Extrapolating from the 5% 2011 estimate cut today's analyst gave AAPL and apply that to the June quarter, and the quarter will produce about 5.00. (This reasoning is very unreasonable because with this chatter the march-to-june quarter will not see a dip as consumers will not 'wait' for the new iPhone. The decline also ignores the awesome demand for the iPad 2.)

Basically, a conservative trailing PE assessment gives AAPL a short-midterm price target of 370.

As for the technicals, there is some resistance around the high 350 and 360 level.

How I plan on trading AAPL: The options I purchased during the week of March 14 decline, I plan on unloading near 357.  The remaining I will hold until 370 is seen.  If AAPL declines to 343-345, I will look to add.

quick thought... channel

Been fairly active regarding market protection trading.  Yesterday I closed out the protection in the AM weakness. But with today's push upward, to what I think may act as potential resistance, and the still overbought condition, I took on protection again.

IMO, to break upward we need to see earnings come through or Libya get resolved (which would mean oil comes down to sub 90 level.  But more importantly earnings. (Either we keep pushing higher and earnings will be a 'sell-the-news' event for the market, or we trend until the reports push us higher.)

FYI... I will post an assessment of the earning revisions on AAPL.  I do not think downward earnings revisions are merited here because the iPad 2 more than handily picks up the slack from an iPhone not being released this summer. (I actually really like the move by Apple, if the chatter is true, and was already factoring it into my assessment as soon as Verizon phone was announced.)  I have not sold Apple because of this, but the potential assault from analyst needs to be washed out. How long it will take is anyone's guess, but I will look to play the weakness. I will act when the trading dynamic of the stock tells me to act.

Monday, March 28, 2011

Market Thought... the technicals and LLNW

Within the confines of the previous Market Thought post 're-assess', there maybe a light pullback or treading.  This is purely technical based on the overbought condition of the market itself and the 10yr yield. The 10yr is also at an obvious SMA resistance.

The setup may facilitate in a light pullback to the 1300 level.

(I took on a light SPY put protection mid-day, but plan on closing it out in any weakness tomorrow. Or I will cover it if the SP500 moves past 1320.)

Also, just wanted to highlight the technicals of LLNW. Apparently the rumor/expectation today was new Facebook business coming their way.

Re-assessing the chart, my discipline will most likely drive me to unload half my position between 7.25 7.50 (depending on the overbought position), and if it pulls-back/consolidates from that level, re-enter. (If/when it sees 8.25, I will unload the entire position.)

interesting divergence

Netflix got the Paramount deal today. With the deal I see LLNW up nicely. (I see it because I own it.) But when checking on Akami, it is not performing as nearly as well as I would have thought.

I figure the deal is the type that 'lifts-all-boats', but LLNW is seriously outperforming.

I am obviously missing something. Maybe there is an upgrade, maybe the traffic beneficiary is LLNW from the deal. I'll keep my eyes open.

Technically, this move is good for LLNW. It makes the 100SMA, on the daily, support. (Looking to sell the current position at 8.25, but will keep trading it as the industry wind is on its back.)

Saturday, March 26, 2011


Checked out the Market Currents within seekingalpha after having a quick bite with the wifey, and noticed a SmartMoney article highlighting 4 Newsletters "beating the Stock Market".

I did not understand why it was written. I did not understand because the type of performance was nothing spectacular, and why one of the major financial magazines were highlighting them. (Good for the newsletter people, but I am left pondering, why?)

I've been keeping track of my performance since the May 2007 (only because my portfolio values in May 2007 have been forever scorched in my memory due to certain events), and I have been tracking well over 100% returns year-over-year. Had my most profitable year (at the time) during the financial collapse. From Sept 2010 to Jan 2011 alone had returns that crushed the newsletter's returns. My 'buy and hold' (timeless) portfolio has done better (for now anyway). 

I guess I do not understand because SmartMoney highlighted mediocrity or maybe I do not understand because SmartMoney is not highlighting me and my blog.  Maybe I'm a hater? Yeah, i'm a jealous hater. :)

j/k, but not really ;)

Albeit, I do not promote the blog, not yet anyway. So how would they know? (cough cough... investigative journalism... cough ;)

Re-assessing AXPW.ob

Over the past few weeks Axion Power (AXPW.ob) saw a tremendous, yet consistent, move upward.

Apparently there were a series of purchases since February reported to the SEC.  IMO, these purchases are high profile. Of the three, one is Blackrock. The other, and more importantly within the alternative energy space, is The Quercus Trust. (The Quercus Trust is well known within the alternative energy space, as it is completely dedicated to the space. It takes a 'shotgun' approach to the technologies/companies out there. Basically, the purchases do not mean much to me, but it does give Axion Power and its technology more visibility within cleantech investors.)

With an appreciation of about 100%, I wanted to re-asses the potential by asking the obvious question, 'what is the potential market cap Axion deserves?' 

I first entered the name at 10/04/10 via the post AXPW - battery play with the premise that the company will benefit from two things: 1. stop-start technology and 2. grid storage.

Stop-start technology progress:

The stars started to align for the stop-start implementation.  Ford told us via a Press Release on 12/27/10 that they will implement the stop-start in 2012 on North American cars via the EcoBoost engine. (I added that day because I thought the market was being inefficient on the news.)

More details started to materialize. An article was released that hinted at the potential market size by 2016. Unfortunately I can not clearly gauge a proper revenue/expense via mass production of the PbC battery Axion produces or components they sell to other manufactures or what they may license out. With 10s of Millions of automobiles and lead-acid batteries being sold every year, a $100M market cap. should be supported for stop-start technology alone.

(The greater efficiency that the PbC technology creates can also be used for the other applications lead-acid is used in: boats, motorcycles and heavy duty equipment.)

Energy Storage:

This is the 800lbs gorilla.  John Petersen provides a plethora of information we can use to estimate market size potential.  He recently wrote an article about it, among many others.  The most important aspects of the article was highlighting the potential and realistic market size.

1. " electric power generating capacity is roughly 4,000 GW, total installed energy storage capacity is less than 128 GW, or 3.2% of generating capacity..."

 2. highlights the potential market size, globally, at $50B.

In another article, he highlights the improvements the PbC technology does to lead-acid batteries. Here is a summary:

"In exhaustive performance tests over the last three years, Axion has demonstrated that the PbC battery:

-Offers a depth of discharge of up to 70%, as compared to 30% for conventional lead-acid;

-Offers stable round-trip energy efficiency of 85%, as compared to 50% to 75% for conventional

-Offers cycle life improvements of 400% or more; and

-Offers dynamic charge acceptance rates that are a 10x improvement over conventional lead-acid.

In combination, these unique features of the PbC battery can reduce capital cost per cycle by an order of magnitude and make the PbC the most cost-effective electrochemical storage system in the industry."

The one thing he does leave out, is that this potential market size will keep growing as the global carbon emissions continue to get cut and enforcement of alternative energy sources supply energy take into effect (wind).

The energy storage potential would have me believe AXPW.ob could have at least a $1billion market cap.

However, the realization of energy storage valuation is a year or two out. Outside of the validation needed for the battery functionality, imo, there needs to be mass market smart grid implementation. But to have mass market smart grid implementation, standards are needed. Industry discussions just started about a month ago. This will not stop testing and minimal commercialization, but to realize mass market appeal standards are needed.

Basically, I think the current market cap. is supported by what is already known about the stop-start emergence. More clarity, and potentially higher appreciation can be given, when we see the production cost and unit/license revenue.

The energy storage industry/concept may have gotten fast-tracked due the political fall out from Japan's nuclear issues.  AXPW.ob will see valuation for energy storage capability depending on how fast industry leaders start pushing this concept.

In the mean time, it is still a very speculative name.

Friday, March 25, 2011

Market Thought... re-assess

Lets re-examine the main market catalysts.

1. Corporate profits.

If Oracle, Accenture, Red Hat, Jefferies and others are an indication of what is to come, their is fuel to push the markets higher.

2. Civil unrest with a major oil producer.

Everyone should want and fight for greater liberty and opportunity, but if it happens in a major oil producing country, the result is obvious. Not all civil unrest is created equally. They all do not have to end up like Libya or even the relatively peaceful transition in Egypt.  Transitions can happen. The greatest example is probably Great Britain. An absolute monarchy peacefully transitioned to a democratic system.  Hopefully Saudi Arabia is on that track.

Current heightened unrest reside in: Libya, Syria, Yemen and Bahrain to name a few. There are some messed up government actions happening there, but the biggest economic threat between the group is Libya, and even they do not merit a significant economic reaction.

3. Japan.

Talk about the mother of 'fucked up scenarios'. Before Japan, on March 11th I posted about the expectation of enacting the no-fly zone in Libya, and that would act as a catalyst for market upside unless a 'wild card' fucked everything up. Well, a threat of a nuclear meltdown with the threat of a quarter of the island to be deemed uninhabitable, caused so much confusion that we all witnessed the ultimate cluster fuck of professionals acting like babies that added to the confusion.

Things are improving, but obviously still messed up. (So if you didn't already, or have extra profits from this past week, visit :)

Mid-to-longer term, Japan is still a wild card. Many will tout Japan's horrible finances, that will limit their ability to recover. (an example from an individual I pay attention to, Mohamed A. El-Erian) I disagree with the premise for a few reasons. Japan's debt burden is overwhelmingly held by its own people.  I believe only some 5% of its debt is held by foreign investors. And if the tragedy has showed us anything, was that the Japanese have the will to do what it takes to overcome. If that means higher taxes, the people can handle it and will deal with it.

4. Europe.

The funds allocated to provide stabilization to the PIGS appears to be working, and the individual countries are slowly but surely reforming. (Albeit, with some kicking and screaming, but its happening.)

Basically, the market is approaching the wait and see mode.  Will profits rise? (I think they will continue to rise as indicated above.) Then the markets will continue to push forward. Will the rebels take Libya? Now with the no fly zone, the chances have significantly improved, and with their promise to maintain all standing oil contracts, then oil prices crumble below 90 quickly.  Markets will rise.  In the mean time, we maybe chillen at the previous channel.

All of the sudden the talking heads, with all their ambiguity and reluctance to commit to a decision are no longer as negative. (And I see they are talking as if 'they' were the ones that had the level heads. I just laugh.)  It is moments like these I am happy I blog and have a real time perspective and handling of the events that unfolded.

Thursday, March 24, 2011

quick thought... technicals

Looks like the two day resistance from the 14SMA will break today. We may go back to our channel trading range.

I will have to re-assess geopolitical and macro-economic forces to get a better gauge when we can potentially break from the channel.

Tuesday, March 22, 2011

Market Thought... technicals

Not a lot to say.  The market is still playing off last week's negativity. With the obvious technical destruction, the obvious resistance seems to be playing out.

Today its the 14SMA, with a negative confirming DMI.  How low will it go is anyone's guess. Judging by the oversold condition on a lot of individual names, the decline should be limited. (Maybe a re-testing of the 1260 level?)

Before Japan I was expecting a sideways market due to Libya's uncertainty, but the amount of confusion and negativity from last week needs to get washed out. The market is in the wash out phase.

Saturday, March 19, 2011

Market Thought... don't listen, think

Yesterday I saw an article from Cramer titled "Tech is Not Done Going Down". A few hours later, I saw another article by him titled "I am Not the Reason Tech is Down".  I laughed when I saw this cause you know his readers were beating him up over it so much so he felt the need to publicly justify the first article.  If Cramer liked AAPL at 350 he should love it at 330, but instead an article written with an extreme general tone is suggesting not to.  That annoys people.

Prior to Japan, we were seeing seasonality play out.  The SP500 started to flat-line in February, and the most of the momentum players (like LLNW, FNSR, AKAM, ARMH, CREE to name a few) were declining or losing mojo.

Sometimes seasonal market trends play a role, sometimes they do not.  However, for the current market action, there is no secret as to why the market started going down.  Once the Japanese situation became a real, threat of category 7, nuclear melt down the market started collapsing.  This is not seasonal, this is very real event driven action.

With this action, uncertainty levels rose to levels that were not reflective to the systemic risks to the system.  This allowed solid names to decline further than they should.

Anyone can see the obvious technical destruction that took place.  This is giving all the big-boys, including Cramer, pause. (The 10yr yield has also come down some, and since it suggest GDP growth, this is giving the more sophisticated players a cautionary tone.)

These hick-ups in macro-economic indicators cause inefficiencies in micro-activity (ie stocks).  Stocks are valued on profits.  If we are to take a step back, and simply think, we can see the inefficiency or opportunity.

AAPL and IBM are examples. (There is a reason why I like them, and have liked them.)

The last 4 quarters AAPL had earnings of: 6.43, 4.64, 3.51 and 3.33.  The trailing PE is 18.43. (Current trailing PE is at a discount to it traditional 19-22 trailing PE.)  Next quarter, the 3.33eps will be replaced with the March 2011 earnings, where estimates are 5.29.

If AAPL stays around 330, and earnings in a few weeks, they will have a trailing PE of 16.6. (Trailing earnings will be 5.29, 6.43, 4.64 and 3.51.) Does that seem reasonable?

Lets look ahead two quarters. In June, Apple is currently projected to earn 5.26eps. (Trailing earnings becomes 5.26, 5.29, 6.43 and 4.64) The PE at 330 becomes 15.26.  Does that seem reasonable given the demand of the products and ecosystem?

The same can be said for IBM. The current trailing earnings are 4.18, 2.82, 2.61 and 1.97. In the next few weeks they will report, and are projected to have 2.30eps.  In June, estimate is 3.01eps.  With a 13.5 PE, the stock should be trading between 160-167. (Assuming the PE stays at 13.5, but I think the growth numbers merit a higher PE.  Historically, around 14-16 was seen. I think 14-15 is very reasonable.)

The technical trends for both IBM and AAPL are still in tact.

Friday, March 18, 2011

AAPL trading poorly

I do not know why it is trading so poorly. The mind start to wonder. Could be:

1. A wash out from this week's negativity regarding the supply issues?

(If this is the case we have the DigiTime's article stating no supply issues with the factories.)

2. Analyst downgrade.

(Looks to be the reason. This is still a play off of #1.)

3. We all know the worst case. But if this was to happen, I still believe a major buy back on the magnitude of $30-40B will also be announced.

Looks to be remnants of the weak hands and negativity of this week.

I will not sell Apple below 370.

Wednesday, March 16, 2011

quick thought... craziness

I am just watching my screen is amazement. At everything. There is just so much confusion everywhere. People talking about physics as if they know what the information means. (I'm a Chemical Engineer, but I am not going to pretend to know what anything about the situation in Japan.) Officials are acting out via the media, which doesn't help an the nuclear-ignorant layman by any means.

The markets are properly reflecting this uncertainty by going down, and the Vix approaching an inversion level with the SP500. (aka huge uncertainty, and if the risk is not systemic it is a big buy signal)

Then there are analyst that are, imo, trying to take advantage of this situation and add to the uncertainty. (Usually in times like these IBM has proven its worth, but not to everyone. Or using the Japan issue to highlight potential supply issues on the iPad 2.)

We are in a state of para-normal. It will stay this way. No chart, no cash flow analysis, nothing will change that until the nuclear meltdown threat eases up. There is no indicator for this, only the breaking news that will come via the media.

I am taking a hit today, a big hit. But the way I have prepared for moments like these are to be cash heavy, and ready to act. And I will act when the time comes.

There are a few certainties:

There is no way I am selling IBM below 167.

There is no way I am selling AAPL below 370.

There is no way I am selling any of my positions with the current level of uncertainty in this market.

IBM to market perform?

I would love to get my hands on this Sanford C. Bernstein & Co report that highlights IBM to a market perform. I would love to pick at it line-by-line.

Seeing how, with the current decline, IBM's current forward PE is 10.82, off 7% from its high and technically consolidated, I will probably be extremely unimpressed with the report, which will lead me to call Sanford C. Bernstein & Co a bullshit know-nothing lazy firm. (Only because I am so well versed with the company, I am so f-n curious as to what is the driving factor.)

Or maybe they are just issuing this report for some corporate client.

Either way, I call bullshit.

Tuesday, March 15, 2011

look interesting

We are still hostage to the nukes. If there is a meltdown, obviously the markets will keep digging. If there is no melt down, and the dust settles within Japan, they can start to rebuild, and a sense of normalcy comes to the markets.

These names look interesting based on the oversold condition, and the demand needed for the rebuild: FCX, CAT and GS

I day traded this today because of the nuke thesis uncertainty. With the reduction of uncertainty, it should over come the 52 heavy resistance and could re-test 60 fairly easily.

CAT has not seen an oversold condition in 6 months. Its pullback is minor, but due to the need of CAT services on top of the already impressive global demand, now maybe a good time to enter.

GS is purely technical. It has seen a nice pull back, and is near its historically very strong support, the 500 SMA.


Here are some trades I did this morning:

1. bought FCX at the open, but sold it in the AM.

2. Added to IBM

3. Added to AAPL

4. Sold TBT (rather be in AAPL and IBM than here)

5. Sold ATI (simply to better position my portfolio flexibility)

I am looking to add if the market keeps declining, but I am still not sure when that will be.

How do you trade around a nuclear meltdown?

I have no clue.

I am not going to pretend to understand how to trade around a nuclear meltdown.

Technically, things have gone to shit, unless things recover today. Fundamentally, stocks look interesting. Psychologically, literally the dust has to settle.

Monday, March 14, 2011


Nothing new to say about the market. We are held hostage to events that are in God's hands. (I only wish the UN would get off their ass, and help an emerging democracy. The fact that we are still seeing a debate around implementing a no-fly zone in Libya after all that has developed this weekend, is quite breath-taking. The UN is basically letting people, who want a voice in their government, die. But I digress... )

So here is a detailed technical assessment of AAPL.

The daily is projecting a limbo state. Not surprising given the strong fundamentals of Apple, but the crappy macro-environment. I will try to take advantage of this limbo as Apple's strong showing of the iPad 2 will lead all analysts to up their estimates. (Prior to the iPad 2 earnings forecasts were not projecting the kind of acceleration we saw this weekend.)

To me, the CCI is indicating the limbo, while the Slow STO set-up projects a high probability of a potential thrust downward.

If a thrust downward is to happen, there is support around 347-348 via the weekly SMA.

I was comfortable adding to my position on the weakness today, and am prepared to add in the high 340s. But due to the demand of the iPad 2, I find it very interesting that the market is allowing AAPL to enter the 340s again.

With next quarter's earnings, and a PE of 19, AAPL will be at 377. (Look at the forward PE link, under links, and these numbers did not factor in the iPad 2 rate of growth.)

some trades...

1. Bought back the IBM options I sold when IBM was near 167.

2. Will purchase AAPL on any weakness, but so far it is holding up.

Friday, March 11, 2011

Market Thought... ton of thinking

If anyone has been monitoring the tumblr posts, you can see the Day of Rage risk appears to have mitigated. (Still some tension, but not as uncertain as it was on Wed and Thurs.)

Also, some really positive signs in Libya. Right now the EU and other countries no longer validate Gaddafi's rule, but they did not recognize the rebel leadership either. (Only France has recognized the rebel leadership.) I can not see a scenario where a no-fly zone is acted upon toward a country with no recognized leadership. IMO, Clinton's planned meeting with the rebel leadership will be instrumental for US to recognize them, and if we recognize them the rest-of-world should follow suite.

Without air support Gaddafi loses. This is why next week is fairly important, and may provide some serious juice to the market if all works out.

Right now, this looks to be the highest probability scenario to play out. A wild card can always take place, and fuck everything up. But I would not want to be short going into next week.

Some of the winnings can go here :) Red Cross

Thursday, March 10, 2011

Market Thought... risk

I was originally going to wait and see how Friday turned out before I posted this, but I found myself unable to fall asleep, so here it is.

Know the risk to this market. We are at a precipice. The SP500 will either collapse or rally hard. The decision is based upon geopolitical factors where the odds, at the moment, are no better then flipping a coin.

I am very glad democracy is taking hold within areas. The people have a right to make decision that guide their homeland's destiny, but creating democracy is not easy. Just look at the history of America, as a key example. But if the people of Saudi Arabia decide to revolt, and the threat of instability gets even remotely close to Libya, the SP500 will see the 360 SMA long-term support around 1160.

The global powers, all of them, will not allow for a severe oil disruption of this magnitude. The G7, G8 or G-whatever will be the first in line to protect the supply.

I will not try to predict the political fall out in Saudi Arabia, all I care about for the purpose of this assessment, is the effect to the market.

There will be a shock to the system. The markets will decline, massively. But the intervention of the Global powers will ensure oil supply and force democratic stability. Due to this anticipated intervention, the long-term trend line should remain intact.

I do not want this scenario to play out, but there is too high a probability it might.

Wednesday, March 9, 2011

charts... ATI, LLNW and the futures

Here are the charts of ATI and LLNW:

ATI - The stock is oversold, and approached its 62SMA support. With these conditions, I entered.

LLNW - Ever since their CEO was interviewed by Cramer a few weeks ago, I became interested with the company and waited patiently. Since that interview the stock has come down some 22%, and is sitting on SMA support. (It is also sitting on weekly SMA support as well.)

Futures - There is weakness in Asia, and the futures, most likely due to China's surprise trade deficit. If I am also able to buy back some of the IBM I sold off today due to this weakness, I will.

I will probably close out the current protection around 1290 regardless of Saudi's 'Day of Fear'.

some action

Took a bit of action this morning.

1. With the decline of the optical player LLNW is sitting on some nice support. Ever since the CEO was interviewed by Cramer I have been keeping on eye on it. (I really liked the way he projected himself, and the business.) I will post the link to the interview and charts later today.)

2. ATI - The decline is near the support to which I would like to enter, and it is oversold, so I entered. I will post an updated chart later today.

3. I eased up on some IBM that I purchased in the 159 area. (Still my largest position. Should be trading in the low 170s/very high 160s as we approach next quarter's earnings report.)

4. With the new additions I added SPY protection in case this 'Day of Rage' in Saudi Arabia is a market spooker. Keeping an eye on it, but since I did a lot of adding to the portfolio, discipline demands protection.

Sunday, March 6, 2011

Market Thought... update

My current market thesis has not changed since Feb 23rd, via the 'acceleration' post. The market appears to be drifting, and for the time being, the drift is sideways. The threat of drifting lower, to the 62SMA is still present, and I still think the downside is limited to the 62SMA as per the 'filter the noise' post.

A few trading notes:

1. I entered a position in the TBT on Friday. If the only scenario is rising rates, might as well be positioned for it. The only instance I can see 10yr rates actually decline is if global instability rises significantly. Right now it is very contained, and various indicators are saying the global economy can more than handle it.

2. I am very tempted to short gasoline, via UGA puts. It's a technical call, with a bit of macro-economic trend mixed in. Gasoline is very overbought, and frankly, I thought current prices would have been the very high-end limit of the current summer driving season (if getting this high at all).

Basically, the Slow stoch is showing a very overbought condition, with a ton of bullishness from the DMI. (The etf is showing a more bullishness than the charting of the continuous contracts.) This should support the CCI to elevate as the price rises. If the CCI rises over the next few days, I will take on this trade via July 2011 50 or 55 strike put.

Friday, March 4, 2011

Jobs data... pretty good

A break down of the numbers show an nice report.

Private sector growth: +222k

Average Weekly Earnings: $782.15, slight rise. (The non-supervisory weekly earnings rise was better.)

All-and-all the report was pretty good, enough to merit current market levels, especially a cause to 'buy-the-dip' if the SP500 sees the 62sma.

Wednesday, March 2, 2011

rising rates

Global rates are rising. (Brazil is the most recent rate rise to 11.75%. If your looking for yield, take a serious look at their Gov bonds.) With economic growth, higher rates are inevitable. But there is always two schools of thought. Whether you're a believer in Bill Gross' disagreeable outlook that rates will rise because of QE2 ending, or the 'I still believe in America' Buffett camp of American economic growth, the conclusion will be the same: higher rates for America.

If this is the only outcome, for good and bad scenario, a way to play it is the TBT. It looks interesting here, via the weekly.

Tuesday, March 1, 2011

Market Thought... filtering the noise

The intraday action indicated some near-term weakness. Technically, the 28/32 SMAs have not broken downward yet, but if they do, the trend is to hit the 62SMA.

The 62SMA on the daily is interesting because it also corresponds to the 14SMA on the weekly, which is proven support for the rally's trading dynamic.

So regardless of the intraday weakness that caught my eye, I think the weakness will be limited.

Many individual stocks are by no means over bought, some are lightly oversold. Basically, at the moment, they seem like they will go with the flow.

Adding support to 'limited-downside' thesis is the oversold condition of the 10yr yield (or very overbought condition of 10yr note). Fundamentally speaking, a declining 10yr yield suggests a declining US GDP. (This contradicts the recent survey.) The fear amongst the big-boys makes sense. If oil stays above 100 for an extended period of time, it will chip away at the consumer and cause a declining GDP. But the technical set up of the 10yr yield suggests this fear is over done right now.

Market noise, caused by a feared slowdown in GDP, may bring the market to the 62 SMA. IMO, that level will bring already consolidated stocks to very oversold conditions. And I will be buying as indicated in the post below.

Despite my belief in the above, we always have to think of all the possibilities. An unlikely scenario, but one that plays off the fear of sustained +$100 oil, may bring the SP500 to the rally's long-term support, the 360SMA.

However I stress this is a very unlikely scenario right now, as it would push stocks of very high cash-flow generating companies to levels that are far to inexpensive, and implies unrealistic geopolitical assumptions. I would have to see real hints of these geopolitical assumptions to think we go to the 360SMA.

If the market heads toward this level, with out hints of the geopolitical assumptions, I will go all in.

left wanting

Here are a few stocks I am looking to enter (or add more to):

ATI around 61-62, AAPL near 342-343, IBM around 158-159 and WFC near 30-31

i'm back... quick market thought

The SP500 looks to wanna break the current SMA supports (28/32), but I do not believe the SP500 will decline past 1280.

I am just so tempted to increase IBM, AAPL and others right now. But I think in the very short-term, a better entry will present itself. That is the trader in me. (If you are not a trader, I am only talking about a few points to the downside. ie IBM may see 158.)

I will give more details and charts later.