For starters, here's a very funny video, lyrics re-written by a member of our live stock market chatroom.
While Tuesday certainly wasn’t a bullish day for the stock market, I’m going to go out on a limb and call it a constructive day. Although there were pretty big losses at the end of the day, and a lot of the selling came in the last hour again, volume was even lighter than it was on yesterday’s up move, and the wild swings, although still there, seem to be calming down a bit. I take this as people starting to come to terms with the situation, and starting to make slightly more rational decisions regarding their investments, rather than the massive panic buying and panic selling that has been the 800 pound gorilla in the room for the last few weeks.
That’s not to say things are getting any better from an economic standpoint, or that this market won’t see any more panic buying or selling, as we are still at extreme levels from a number of perspectives, but the action this week does hint at some form of resolution being worked out for the market. That is something to be optimistic about, as is the fact that at the time of this writing, AAPL is up 10% in after hours trading, and YHOO is up better than 5%.
The VIX didn’t gain much back after yesterday’s nearly 25% haircut. That’s another reason to be optimistic about where this market seems to be going. A nice, orderly consolidation/ pull back would be in keeping with our thinking that the markets are trying to stabilize here.
The Dow fell 231.77, or 2.50 percent, to 9,033.66, on even less volume than Monday, when the volume was relatively light compared to recent sessions. While anything can still happen as the market digests all the economic news that has been thrown at it recently, we can see the swings getting more & more narrow in range, and the daily chart shows a bit of a triangle formation starting to set up.
The Standard & Poor's 500 fell 30.35, or 3.08 percent, to 955.05. On the daily chart you can see the same ascending triangle pattern forming, but below is the hourly chart, which shows what looks like pretty solid support right around 950.
The Nasdaq composite index shed 73.35, or 4.14 percent, to 1,696.68. the 15 minute chart shows a slight breach of an intraday double bottom, but the after hours trading in AAPL & YHOO would seem to indicate a higher open for the index, barring any real turnarounds.
Light, sweet crude fell $3.36 to settle at $70.89 barrel on the New York Mercantile Exchange. USO fell nearly 5% on the day, but is holding above recent lows. We could see a consolidation here, which would probably be a healthy thing.
Gold fooled us last night, metals looked very nice yesterday and took a hit today. However gold didn’t break the recent lows either, and if it does, the September lows aren’t far off either.
Our portfolio stocks remain light into what is still a very choppy market. We are going to keep things pretty light until this thing stabilizes a bit more, and will continue to trim losses and take profits wherever applicable. As such we are going to add one new short to the TBT list to compliment our one long, which we are raising the stop on to greatly reduce the downside exposure after a weak close today. We are very optimistic about the way this market is acting, and are hoping that we will see some of the best tradin conditions of the year in the next month or two, but patience will be required. There are some really nice setups in the watchlists above for intraday trading purposes tomorrow, of which there should be plenty. Have a great evening, see you tomorrow.
Showing posts with label stock market. Show all posts
Showing posts with label stock market. Show all posts
Tuesday, October 21, 2008
Tuesday, September 23, 2008
If only I was in the Senate, what I would have asked Paulson & Bernanke...
I’m almost embarrassed to admit that I spent most of my day glued to cnbc… not that I was looking for investment advice or anything, but I really wanted to see how Paulson, Bernanke, and Cox pitched their bailout plan to the Senate committee, and I wanted to see if any of the senators in the committee asked any of the questions that I would have - actually only one question really, namely:
“Why, if you guys are the ones who allowed this to happen in the first place, telling us the entire way down that everything was fine, the economic system was strong, take a long term outlook, etc, should we have enough trust in you to fork over 700 billion - that’s right - BILLION - dollars, on your word that it will now fix what you told us all along wasn’t broken? And if it doesn’t work, aren’t we at the same place we are at right now, minus nearly a trillion dollars?!?!
Oh and by the way, Hank, how much do you stand to lose if your old firm, Goldman Sachs goes under, and how does that play out in your scenario about forking over this money to you ASAP without investigating the situation?
Oh and one more thing - why is it, that the hard working, tax paying members of my district, many of whom just saw their net worth cut by substantial amounts listening to the likes of you clowns, and the clowns on CNBC telling them to buy & hold, that the economy was still sound, have to bail your old buddies out of their bad investments? Has Goldman, or Merrill, or any other broker, bank, or fund ever bailed them out of a bad investment? Doesn’t it specifically say, right from the terms of use on Goldman’s website that:
“No determination of suitability has been made; not all risks are disclosed; private advisors should be consulted: The fact that GS has made the data and services provided on this Web site available to you constitutes neither a recommendation that you enter into a particular transaction nor a representation that any product described on this Web site is suitable or appropriate for you. Many of the products described on this Web site involve significant risks, and you should not enter into any transactions unless you have fully understood all such risks and has independently determined that such transactions are appropriate for you. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or complete discussion of the risks which are mentioned. You should neither construe any of the material contained herein as business, financial, investment, hedging, trading, legal, regulatory, tax, or accounting advice nor make this service the primary basis for any investment decisions made by or on behalf of you, your accountants, or your managed or fiduciary accounts, and you may want to consult your business advisor, attorney, and tax and accounting advisors concerning any contemplated transactions.
No liability for content; no liability arising from use: Goldman Sachs shall have no liability, contingent or otherwise, to the user or to third parties, or any responsibility whatsoever, for the failure of any connection or communication service to provide or maintain user's access to this service, or for any interruption or disruption of such access or any erroneous communication between Goldman Sachs and user, regardless of whether the connection or communication service is provided by Goldman Sachs or a third-party service provider. Goldman Sachs shall have no liability, contingent or otherwise, to the user or to third parties, for the correctness, quality, accuracy, timeliness, pricing, reliability, performance, continued availability, completeness or delays, omissions or interruptions in the delivery of the data and services available herein or for any other aspect of the performance of this service or for any failure or delay in the execution of any transactions through this service. In no event will Goldman Sachs be liable for any special, indirect, incidental or consequential damages which may be incurred or experienced on account of the user using the data or services made available herein, even if Goldman Sachs has been advised of the possibility of such damages. Goldman Sachs will have no responsibility to inform the user of any difficulties experienced by Goldman Sachs or third parties with respect to the use of the services or to take any action in connection therewith.”
Doesn’t that pretty well state that “Hey, you’re on your own here pal, and if you screw up, we’re not going to take any responsibility whatsoever to bail you out, so do your homework before investing your money.”? So Hank, why is it that if they make it abundantly clear that while they made billions of dollars on the backs of the hardworking members of my district but clearly state that they will not back up their bad investments, why is it that the taxpaying members of my district should be liable to bail them out?”
Now that’s what I would have asked, and while there were a few questions that did touch on those subjects, most were sidestepped with the kind of stuttering genius one would expect from ole Hank. Not once did we really get a clear answer from anyone on anything, except the fact that we were all in really big trouble and we needed to approve this little loan yesterday or we’re all going down fast. And sadly, most of the senators there have little to no idea as to how the markets really work, and therefore weren’t really in a position in the debate to call these guys out on anything.
Meanwhile, the markets were holding up surprisingly well throughout most of it. At it’s high, the Dow was up over 100 points, and the NASDAQ was up about 20 points at the days high.
But by the last hour of trading the heavy selling started again. Although the volume has been very light over the past two days, the fact that many investors are simply sitting o the sidelines until this whole thing plays out, especially with the newly imposed ban on short selling (discussed in this weekends market outlook). All market averages dropped better than a percent on the day when it was all said & done, not a single one of them with any viable support before last weeks lows.
Now this looks like quite a bearish situation to me, and our bearish outlook on this market has served us well, I seriously doubt you’ll find many out there posting the kind of gains that we have of late in this market, and looking at our portfolio versus the market overall for the year it’s pretty clear that buy & hold is no longer a viable option.
That said logic has certainly been sparse to non existent as of recent months, so a big move to the upside cannot be ruled out here. As such we are going to add one new long to the mix to keep the portfolio a little more hedged while remaining light and with a bias to the short side. The commodity rally didn’t follow through into today, but we are still looking at many oil, gold, and silver (congrats to stock market chat room member art for a great trade on SIL today, while I’m on the topic of silver) to provide good trades to the upside at some point in the next few days, possibly after a bit more consolidation. All were overbought coming in, and some profit taking is a fairly healthy thing as we see it. There are a number of nice setups both long & short listed in the watch lists above for potential intraday trades tomorrow, but remember to keep a close eye on things, the reversals can be fast and unforgiving if you are complacent. That said there are plenty of great opportunities out there, and we’ll keep doing our best to find them for you. Have a great evening, happy trading!
Quote of the Day
"I'm not concerned about all hell breaking loose, but that a PART of hell will break loose... it'll be much harder to detect."
George Carlin (1937 - 2008)
“Why, if you guys are the ones who allowed this to happen in the first place, telling us the entire way down that everything was fine, the economic system was strong, take a long term outlook, etc, should we have enough trust in you to fork over 700 billion - that’s right - BILLION - dollars, on your word that it will now fix what you told us all along wasn’t broken? And if it doesn’t work, aren’t we at the same place we are at right now, minus nearly a trillion dollars?!?!
Oh and by the way, Hank, how much do you stand to lose if your old firm, Goldman Sachs goes under, and how does that play out in your scenario about forking over this money to you ASAP without investigating the situation?
Oh and one more thing - why is it, that the hard working, tax paying members of my district, many of whom just saw their net worth cut by substantial amounts listening to the likes of you clowns, and the clowns on CNBC telling them to buy & hold, that the economy was still sound, have to bail your old buddies out of their bad investments? Has Goldman, or Merrill, or any other broker, bank, or fund ever bailed them out of a bad investment? Doesn’t it specifically say, right from the terms of use on Goldman’s website that:
“No determination of suitability has been made; not all risks are disclosed; private advisors should be consulted: The fact that GS has made the data and services provided on this Web site available to you constitutes neither a recommendation that you enter into a particular transaction nor a representation that any product described on this Web site is suitable or appropriate for you. Many of the products described on this Web site involve significant risks, and you should not enter into any transactions unless you have fully understood all such risks and has independently determined that such transactions are appropriate for you. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or complete discussion of the risks which are mentioned. You should neither construe any of the material contained herein as business, financial, investment, hedging, trading, legal, regulatory, tax, or accounting advice nor make this service the primary basis for any investment decisions made by or on behalf of you, your accountants, or your managed or fiduciary accounts, and you may want to consult your business advisor, attorney, and tax and accounting advisors concerning any contemplated transactions.
No liability for content; no liability arising from use: Goldman Sachs shall have no liability, contingent or otherwise, to the user or to third parties, or any responsibility whatsoever, for the failure of any connection or communication service to provide or maintain user's access to this service, or for any interruption or disruption of such access or any erroneous communication between Goldman Sachs and user, regardless of whether the connection or communication service is provided by Goldman Sachs or a third-party service provider. Goldman Sachs shall have no liability, contingent or otherwise, to the user or to third parties, for the correctness, quality, accuracy, timeliness, pricing, reliability, performance, continued availability, completeness or delays, omissions or interruptions in the delivery of the data and services available herein or for any other aspect of the performance of this service or for any failure or delay in the execution of any transactions through this service. In no event will Goldman Sachs be liable for any special, indirect, incidental or consequential damages which may be incurred or experienced on account of the user using the data or services made available herein, even if Goldman Sachs has been advised of the possibility of such damages. Goldman Sachs will have no responsibility to inform the user of any difficulties experienced by Goldman Sachs or third parties with respect to the use of the services or to take any action in connection therewith.”
Doesn’t that pretty well state that “Hey, you’re on your own here pal, and if you screw up, we’re not going to take any responsibility whatsoever to bail you out, so do your homework before investing your money.”? So Hank, why is it that if they make it abundantly clear that while they made billions of dollars on the backs of the hardworking members of my district but clearly state that they will not back up their bad investments, why is it that the taxpaying members of my district should be liable to bail them out?”
Now that’s what I would have asked, and while there were a few questions that did touch on those subjects, most were sidestepped with the kind of stuttering genius one would expect from ole Hank. Not once did we really get a clear answer from anyone on anything, except the fact that we were all in really big trouble and we needed to approve this little loan yesterday or we’re all going down fast. And sadly, most of the senators there have little to no idea as to how the markets really work, and therefore weren’t really in a position in the debate to call these guys out on anything.
Meanwhile, the markets were holding up surprisingly well throughout most of it. At it’s high, the Dow was up over 100 points, and the NASDAQ was up about 20 points at the days high.
But by the last hour of trading the heavy selling started again. Although the volume has been very light over the past two days, the fact that many investors are simply sitting o the sidelines until this whole thing plays out, especially with the newly imposed ban on short selling (discussed in this weekends market outlook). All market averages dropped better than a percent on the day when it was all said & done, not a single one of them with any viable support before last weeks lows.
Now this looks like quite a bearish situation to me, and our bearish outlook on this market has served us well, I seriously doubt you’ll find many out there posting the kind of gains that we have of late in this market, and looking at our portfolio versus the market overall for the year it’s pretty clear that buy & hold is no longer a viable option.
That said logic has certainly been sparse to non existent as of recent months, so a big move to the upside cannot be ruled out here. As such we are going to add one new long to the mix to keep the portfolio a little more hedged while remaining light and with a bias to the short side. The commodity rally didn’t follow through into today, but we are still looking at many oil, gold, and silver (congrats to stock market chat room member art for a great trade on SIL today, while I’m on the topic of silver) to provide good trades to the upside at some point in the next few days, possibly after a bit more consolidation. All were overbought coming in, and some profit taking is a fairly healthy thing as we see it. There are a number of nice setups both long & short listed in the watch lists above for potential intraday trades tomorrow, but remember to keep a close eye on things, the reversals can be fast and unforgiving if you are complacent. That said there are plenty of great opportunities out there, and we’ll keep doing our best to find them for you. Have a great evening, happy trading!
Quote of the Day
"I'm not concerned about all hell breaking loose, but that a PART of hell will break loose... it'll be much harder to detect."
George Carlin (1937 - 2008)
Sunday, July 27, 2008
10 Ways To Beat The Stock Market This Week!
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Put another stock market roller coaster ride of a week in the books. What started as a potentially strong week for stocks, particularly the struggling financial sector on a decent Bank of America report, and government bailout news for mortgage giants Fannie and Freddie. A sharp pullback in the previously gravity free commodities certainly didn’t hurt anything either. But around mid-day Wednesday that all changed. We saw a peak and rollover of the financials and with it went the market.
Friday, and I will preface this with the fact that Fridays of late have been pretty horrific – I forget the exact number but it was something to the effect of since the bear market has started we have lost around 19% on the S & P index, with 14% of the losses taking place on Fridays. So that said, although Fridays bounce back was low volume and otherwise pretty lackluster, it could have been much worse given the condition of the market on Thursday.
From where we’re sitting here it appears the market, and financial stock bounce that began last week and carried into the early part of this week, is over. Although oil and gold did not have particularly strong days to close out the week, other commodities such as coal did, and on all the technicals do suggest that we’re nearing the end of this pullback, at least for the time being. (Keep in mind the coming election and the fact that often times oil will go down into election season, which may trump the technical signals here.)
That said, two of the four major indexes that we track held pretty major support levels, so the early part of the week could very well see some chop before a full resumption of the downtrend occurs. The Dow is still holding that trendline that I’ve been yapping about for about a week now, as well as the 20 day simple moving average, while the Nasdaq composite is still holding onto the 10 day exponential. All share a mixed signal of being short term overbought but long term oversold, adding to our theory that we could see a bit of tug of war before the trend is resumed.
Let’s take a look at a few of these commodities and market indexes to try and get an overview of where we’re at:
The Dow on a daily chart is holding the trendline and the 20 as mentioned. We failed to break out of the January lows that were violated in late June and now acting as resistance.
We have stochastics rolling down from a short term overbought condition caused by last weeks’ rally. Friday saw a slight gain, but it was on very low volume, even for a summer Friday.
Looking at the dow again, this time on a weekly chart, we can see more of the same and a little different. Notice the inverse effect of the stochastics, crossing up from an oversold condition caused by the big drop since late May, at the 50 week simple moving average. The 2008 lows that were just mentioned as resistance are also converging with the 200 week simple moving average, making that area that much more powerful in terms of resistance.
The S & P by comparison, does not look as good as the Dow. Although we had actually broken out from the prior 2008 lows for a couple of days, Thursday sent it shooting down through and below, and Friday it failed to get above any support levels, so we are now looking at lots of resistance overhead. MACD and stochastics are also both pointing the way down on this chart.
The Nasdaq looks a little better than the other market averages, but by no means bullish. Volume Friday was again very low, we are still overbought on the daily chart, but are holding most support here.
The gold index bounced off its 100 day simple moving average on Wednesday and after a few retests looks like we have some solid support at the 917 level. We do also appear to have some resistance in the 935-940 range.
Oil has now pulled back to the same 100 ay simple moving average where gold found support. Stochastics on all time frames show a now oversold condition that may attract some new speculators who were afraid to buy in when it was so extended. Again, keep n mind that it is coming into election season.
We had a very nice week in terms of our portfolio stocks, watchlist stocks, and chatroom calls. We are down to only a few open positions after taking profits in a couple of longs and one short, also stopping out of a short at an even trade. Not bad for such a choppy, mixed up market. The volatility, while many continue to whine about it, continues to give us more than our fair share of great intraday and short term swing trades. Airlines, financials, and commodity plays have been trading in such big ranges that those able and willing to get on for the ride can and have made some phenomenal trades.
As mentioned this is most definitely a stock pickers market, which suits our fancy just fine. We are adding two new short plays to trigger and one long for Monday in the end of day portfolios, and have a few dozen of our favorite trading setups listed in the quick pix watchlists above. Enjoy the ride, and happy trading!
"Once we believe in ourselves, we can risk curiosity, wonder, spontaneous delight, or any experience that reveals the human spirit."
E E Cummings (1894 - 1962)
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