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Thursday, January 29, 2015

$amzn chart dump - great numbers

Key take aways:

1. GM continue to rise. (Q-to-Q GM rose suggesting expansion at a higher rate.)
2. Operating Margins spiked.
3. Ex. Currency revenue beat.
4. Prime Membership is a huge moat.

$yhoo to $baba trading dynamic

Wanted to add to yhoo today, but the tight dynamic is hard to ignore.

Fairly tight with little, if any arbitrage. (Especially as the street's perception is that of a weak core, which I disagree with.)

$baba so much for first impressions

Also up in smoke, hopes of a Chinese company that could compete globally. (At least until Xiaomi is ready.)

Looks like the IPO opening price is the support to watch. 

So much for the price hikes going into singles day.

$xom into earnings

That crushing sound, its the stocks of companies that are pegged to commodities. Will xom endure?

I freaken hope so. (Skrew Chanos' short.)

The biggest worry with xom is the sustainability of its dividend. XOM will be dishing out some $11B dollars. Thats a huge fucking number. But a number xom should easily be able to handle given their huge free cash flow.

Going into the quarter two big headwinds are commodity price decline and the dollar conversion. (The size of this company would suggest multi-billion dollar adjustment. As was evident in Apple's quarter.)

Last time oil collapsed toward 40-50, the market was in a panic and the dividend was much smaller. 

A point of comfort for those long xom, through the 2008-2011 decline of xom, the dividend yield did not exceed 3.2%.

At current levels, xom dividend yield is already near 3%. Hence the extrapolation,  if the dividend is not lowered the stock downside should be limited with the low-end support (near 86) to be maintained. 

Wednesday, January 28, 2015

Great $fb report. Revenue decelerating

Numbers looks great. Revenue growth decelerating, even with currency adjustments.

$yhoo core going in right direction

Mobile revenue

Q3 2014: ~$200M
Q4 2014:   $254M

This is the only revenue I reakly care about, but from a web point of view Yahoo is maintaining itself. Comscore still has it pegged at #2 behind Google sites, and search is gaining. (We should start seeing the fruits of search share into Q1.)

I too wish (GAAP) revenue was growing year-over-year, but to say things are not improving is to be disingenuous. 

In the mean time, technically 52 is resistance but down side seems limited unless BABA craps out.

Monday, January 26, 2015

$aapl super high expectations

Chatter going into the quarter is basically unanimous, to-be-massively-record-breaking.

Higher revenue, higher ASP, and more importantly, higher expectations.


AAPL is at the higher-end trading range, with a pretty overbought position and high expectations.

Typically not a good recipe for a stock to pop after earnings. Especially when year-over-year comparisons will be difficult.

BUT (there is always a but)

If the market is blah due to discounted expectations, downside should be limited. There is very little doubt anymore on the iOS ecosystem. This facilitates a continuation of its long-tern uptrend.

I was hoping aapl would see a decline toward 95 during the recent market decline, but that never happened. So its unlikely it will see 95 now, more like 106-107, if we are lucky.

Saturday, January 24, 2015

$spy Greece or Ukraine or 🙈🙉🙊

Which will the market choose?

Greek elections

Off the heels of the sizable ECB QE, Greece will finally get some benefit of a lower Euro, something it should have had 4 years ago. But that may not last long, if they leave the Euro.

The ECB will cut greek banks off, at least for 6 months. Greek inflation will spike. Drachma will decline far more than the Euro ever will. If policy shifts to enable economic growth, Greece will be better off. But it will be a very tough year. The uncertainty will be the ripple effects, finacially and politically. The ECB is ready to smooth over financial market-mechanic craziness, but the will of politicians need to remain. The idea of the Euro (and a fiscal stimulus) are desperately needed.

Ukraine flareup

Whatever bullshit cease fire that existed is officially over. Russia is still antagonizing. Sanctions will remain. Some EU chatter to remove sanction, are seemingly economically motivated. This is why a European stimulus is needed. A stimulus that can over shadow the economic contrabution of Russia. To remove the economic leverage Russia has over Europe. There are no market-mechanic issues evident here. Just the promotion of market stagnation. 

If the market chooses 🙈🙉🙊, the SP500 can push towards 2080 to 2100.

If the market chooses to cling to one of the issues the SP500 may see 2020-2040. Pending how tight the clinging is, the SP500 may push towards 2000.

Wednesday, January 21, 2015

$ibm tradable again

Even though I'm an unapologetic momentum whore, I'm also a long-term lover. (Hence my relationship with IBM.) 

The stock looks to have become tradable again, as structure begins to form.  The true negative from last nights quarter was the lack of growth for free cash flow. With that, opportunity.

IBM has been pushing a lower-end trailing multiple trading range, but it only stays near 10-11 briefly.

Guidance was for 15.75-16.25 for 2015. Assuming a 10 PE, the stock, at a minimum, can trade between 157-162. Decent upside, for a minimum expectation.

Technically, the time to enter appears now, or just under 151. (Already own it for a IRA account, sitting for the dividend and turn around. Gonna trade it for the fund if it breaches 151, hoping for a flush.)

Tuesday, January 20, 2015

Initial thoughts on Shack-onomics

While living in the city, Shake Shack wasn't my thing. The shack in Madison Sq Park had obscenely long lines, for what seemed like a mediocre burger. Many years pass, a jersey location opens and I give it another chance. Greatly improved. Scalability. And a fuck-yeah-awesome shake. Becoming a shack-fan, I obviously had to look at the S-1.

Interesting facts and extrapolations:

1. Tax rate is really low, too low

2. Growth seems solid

3. Wanted to see more of a quarterly breakdown of the income statement

4. Long-term company owned stores to grow to 450. (This could suggest a long-term revenue growth towards $1B, ~10x current revenue.)

5. Licensing revenue growing fast.

At ~$15/share, the ipo is interesting. If it doesnt jump too much, or in times of weakness, I'll be interested.

$ibm into earnings?

The visual of no hope:

But thats the point, is all the negativity of 'no hope' baked into the stock?

All the negatives have been played out. Can it rally on decent news?

1. New mobile first applications

2. New hardware released

3. Stable to increased bookings

If there is some hope of improvement, the debbie downers could be in for a surprise.

The odds are in the downer's favor.  Few and far between stock rises over the last two years.

Monday, January 19, 2015

Decline in oil $xom

Interesting tweet from the St Louis Fed.

Supply vs demand based on the following:

So supply shock is a non factor, and the combo of demand shock that leads to the price action. When looking at proce action, an inefficiency appears evident. 

Looking at 2006-2007, demand shock factors seem consistent to where they are today. Yet oil was trading between $60-80. Today its trading near 45-50. The dollar does not appear to be a contributing factor to the difference. Dollar is trading near 2006 levels.

With the above data, one is left to suggest the difference is behavioral. Debbie downers be like, SELL SELL SELL. 

Still liking xom here.

Friday, January 16, 2015

$tnx reversal

Interesting reversal in treasuries. Will it matter? Probably not cause its all Russias fault. ("It just is" is my argument.)

Thursday, January 15, 2015

Chart $fb

Expecting a short term pop off the 38sma. Long-term, still think it needs to consolidate its +$200B market cap given its est 2015 revenue.

Saturday, January 10, 2015

Cause its $baba weekend

On Friday I became a 2x baba. So obviously the focus is $baba. 

Four days of very good action, barring the last 2.5 hrs of trading on Friday. On the 6th there was a constructive higher low off the 100 support level. Then the intraday SMAs performed beautifully. Even when the SMAs were potentially breached, horozontal support held up That is until 1:30pm on Friday.

Where will you go? Re-test 102 level or 100?

102 is also supported from an early December low. But 100 is the obvious strong support. 

$baba is at the point of consolidation where it should break out, given Feb 19th is Chinese New Years and an important retail season in China.

Looking for 110, but depending on sales strength and market psychology, it could test its highs. 

Tuesday, January 6, 2015

Charts $baba $twtr $mon $yhoo

baba - bouncing off 100, and potentially going to 106. The closer Chinese New Years gets, baba should break the negative trend.

twtr - if nice action to continues, 44-45 is the next stop. But once the street re-gains confidence, twtr is a +$50B company.

mon - its not a seed company, its a data company focused in agriculture. Now is interesting, but 110 looks to have the better bang for the buck. (Although this may change come the earnings report tomorrow morning.)

yhoo - tumblr looks to be gaining its stride. From a brand perspective, tumblr probably offers the best native ads for traditional brands. If tumblr is gaining, the core biz is terribly under valued, obviously.

Monday, January 5, 2015

Market Technicals $spy

Getting closer to the bottom. An argument for 1940s as an extreme bottom is easy to make: 200sma on daily, 14sma on monthly, and 62sma on the weekly.

But the action looks to depend on the Vix. As the Vix approaches 36-low/mid 40s, the SP500 starts to become an all out buy. As suggested by the chart below, when removing the outliers of 2005-2007 (artificial action due to mortgage fiasco) and 2009 (the real threat to the global financial system).

Sunday, January 4, 2015

2015 Market Risks $spy $bac $fxe $baba

Starting off the new year with the vix elevated, and the hang over. No better time to talk about the prominent 2015 market concerns.

1. Rising rates

Rising rates gives, especially the treasury yields, give competition to other investor instruments (including Miss Market). This would lead to multiple compression. But if earnings hold up, at current levels, market seems like its in decent shape. (Below is SP500 target with multiple compression of forward anticipated earnings through Q1.)

The residual risk (more of a benefit), higher rates are better for the banks, especially BAC. Which is still valued on book. Higher rates will allow the stock to trade toward 20, the higher-end of its intangible book value.

2. Europe

Europe has been a risk for 7 years now. Although, this time really is different. (Stop laughing! I'm cereal!) Europe on the whole is basically fucked up, especially youth unemployment. Lets put aside the long-term structural issues, that have given the 'extreme' political groups a bit of resurgence (basically everywhere), and simply focus on the Grexit because it is in arms reach. 

Fiscally, all of the PIGS are in seemingly better shape, except for Greece. I'm most definitely biased here, but economically the EU should have done more to during the reset of their debt. And Greece should have been more aggressive with their policy changes. Regardless, a controlled exit is more likely. Greek debt is not as dangerous to the EU (mostly German) banks as they once were. And if there are flare-ups in the bond markets, the ECB is there (with unlimited fire power) to calm things down. 

A public-private stimulus fund has been talked about. A concern for Greece, if they leave the Euro, will that mean no stimulus funds? Not sure what is more needed, a proper default level or stimulus funds. Maybe the former.

The decline in the Euro helps, but for Greece more is needed to battle unemployment. (A Euro at par with the dollar, vigilance on complacent policy and fiscal stimulus.)

Either way, Europe will definitely not allow Greece to leave the Union. Without question, Greece is needed for strategic-security reasons to the south of the continent.

3. Russia

Until Putin stops acting like a douche, the Ruble will keep falling and oil will stay depressed. Once he stops, or the $400B foreign currency reserve cushion depletes and can no longer afford to act like a douche, global GDP will accelerate (and Germany will breath a sigh of relief).

The black swan here is how Puten or a successor will act. The most dangerous animal in the jungle is a wounded animal. How will this wounded animal act when pushed too far into the corner (even if it deserves to be there)?

4. China's financial system

President Xi is working on corruption, and maybe trying to remove some of the funky accounting and debt issuance. But there has been a large accumulation of corporate debt. These risks are not new, and have been talked about as much as China's ghost cities. But in the latter part of 2014 we saw the central back start to accomidate. The big question is what strategy the Chinese powers-that-be will take? Allow for defaults or zombie banks? (There is about $4T reserves it can utilize.)

Either way, the actions to be taken appear to be in a controlled manner, minimising a potential domino effect. Also, any financial crisis that were to happen in China is inherently ring fenced. There is no or minimal interbank lending with western institutions. A real consequence would be a big slowdown in global GDP growth. 

A wild card here, if there is a financial issue in China, curious how it will effect one of the largestsfinancial institutions in the world, Alipay (Tianhong Asset Management).