Friday, October 30, 2009
Trade - F
Ford is reporting on Monday, 11/2. I have used the recent consolidation in F to build a position. (I entered more today, increasing from the Wed purchase.)
Wednesday, October 28, 2009
Market Thought... consolidation
There is a consolidation taking place with the 10yr note. Previously I indicated if this was to happen I would look to get into the TBT.
The 10yr yield is coming down, and approaching its 38SMA, and stronger 3.33 support.
I will most likely use this decline to enter the TBT soon.
Also, this indication may suggest a market consolidation to which the SP 500 may bounce off the 62SMA support or the support around 1025-1030.
Right now, the clarity is on a bounce from the 62SMA for the SP500. IMO, this an opportunity to enter the UUP and TBT to play the dollar rally and higher market rates.
NOTE:
Hedging my market thesis, I also have long positions in NLC, just got a limit order executed for F, PWR and BKE. Also, if PWR see below 21 with this decline, I will enter a 'larger than initial' position as the SP500 approaches its 62SMA.
I am hard-pressed not to play AAPL or GS here for a bounce, but discipline holds me back.
The 10yr yield is coming down, and approaching its 38SMA, and stronger 3.33 support.
I will most likely use this decline to enter the TBT soon.
Also, this indication may suggest a market consolidation to which the SP 500 may bounce off the 62SMA support or the support around 1025-1030.
Right now, the clarity is on a bounce from the 62SMA for the SP500. IMO, this an opportunity to enter the UUP and TBT to play the dollar rally and higher market rates.
NOTE:
Hedging my market thesis, I also have long positions in NLC, just got a limit order executed for F, PWR and BKE. Also, if PWR see below 21 with this decline, I will enter a 'larger than initial' position as the SP500 approaches its 62SMA.
I am hard-pressed not to play AAPL or GS here for a bounce, but discipline holds me back.
NLC - nice quarter
What a great quarter. Growth is not there yet, but they are becoming lean and mean. Boosting their cash flow to a very impressive level. All this was done with a reduction of inventory by 17.5% from Dec 2008.
This is simply great.
When revenue growth kicks in (which management indicated it will start, especially in Asia, in Q4), the earnings power of this company will be very very nice.
Even with today's up move, NLC is still not overbought and I am hard pressed for reasons to sell into this strength.
As the market declines, I will be adding NLC into the intra-day weakness.
(The story here is not an economic sensitive story. Its a company turn around story, that will exponentially benefit as the economy turns.)
This is simply great.
When revenue growth kicks in (which management indicated it will start, especially in Asia, in Q4), the earnings power of this company will be very very nice.
Even with today's up move, NLC is still not overbought and I am hard pressed for reasons to sell into this strength.
As the market declines, I will be adding NLC into the intra-day weakness.
(The story here is not an economic sensitive story. Its a company turn around story, that will exponentially benefit as the economy turns.)
Tuesday, October 27, 2009
Market Thought... carry trade
After reading a few articles the other day, and watching Roubini on CNBC yesterday, I realized my thesis for the dollar rally is basically describing the 'dollar carry' trade, but not so elegantly. (But I was posting to prepare for it before everyone else :)
Anyway, I digress... saw this article on CNBC today, and it got me thinking. What would be the most severe impact if this unwind really swings in the other direction. A worst case scenario of sorts. After all, we have to keep ourselves a few steps of these so called 'experts', so we can beat them to the trade and ride their wave.
From what I can see, from a longer macro perspective of technicals, the possibility for the SP500 to reach around 950 is not out of the question.
I state this because 950 is a major support from this current market rally dynamic.
A look at closer more micro perspective indicates to me that there are multiple supports on the way to 950. One of which is very strong, the 320SMA. Still its around 950.
The red line, around July, is when the dollar started to collapse, and the market rallied due to it. So a bear can really argue that the true low from the carry trade to unwind is the low 900s on the SP500. But the strength and stability in earnings profits will prevent that.
Anyway, I digress... saw this article on CNBC today, and it got me thinking. What would be the most severe impact if this unwind really swings in the other direction. A worst case scenario of sorts. After all, we have to keep ourselves a few steps of these so called 'experts', so we can beat them to the trade and ride their wave.
From what I can see, from a longer macro perspective of technicals, the possibility for the SP500 to reach around 950 is not out of the question.
I state this because 950 is a major support from this current market rally dynamic.
A look at closer more micro perspective indicates to me that there are multiple supports on the way to 950. One of which is very strong, the 320SMA. Still its around 950.
The red line, around July, is when the dollar started to collapse, and the market rallied due to it. So a bear can really argue that the true low from the carry trade to unwind is the low 900s on the SP500. But the strength and stability in earnings profits will prevent that.
Friday, October 23, 2009
Market Thought... cautious
I am being cautious here. The yield has breached a resistance point, and I am looking for the dollar to begin to rally. (This could also be a consequence of knowing the Fed will stop buying the notes.) Whatever the case, IMO, higher market rates will force their hand to raise the Fed fund rates.
Even with my thesis in play, I will probably not unload all my stocks. Will most likely keep BKE, PWR, UUP and any other stock that gets all of their revenue from the US. As I think the dollar is setting up for a rally.
Thursday, October 22, 2009
Trade - NLC
NLC looks interesting here, and I entered the name. Its consolidated, sitting on support and in an industry I really really like (clean water).
fyi... NLC reports next week. Can move the stock either way. If it rallies before earnings, I will most likely take profits. (But this is a name I like for the very long-term.)
fyi... NLC reports next week. Can move the stock either way. If it rallies before earnings, I will most likely take profits. (But this is a name I like for the very long-term.)
Moody's... not so much of a hedge
Got to swallow this one. I indicated, in a previous 'Market Thought' post, I was playing MCO as a market hedge. Needless to say, it has not been working out... as a hedge or as a general trade.
Basically, as a function of a market hedge it has failed me, and cost me.
I do not know if it has enough juice to break the negative trend, but with relatively favorable news regarding the credit rating agency bill Congress is voting on, it could move up.
MCO is still in its overall down trend, but areas to which I thought would not break upward with its overbought conditions, breached. (The box highlighted on the chart)
Basically, as a function of a market hedge it has failed me, and cost me.
I do not know if it has enough juice to break the negative trend, but with relatively favorable news regarding the credit rating agency bill Congress is voting on, it could move up.
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