Cramer is Wrong on Housing - Again
March 25, 2008 1:33 PM
Cramer’s call that we have or are seeing a bottom in housing is dead wrong. I said many, many months ago (almost a year, I think) on his and one of the Fast Money boys call to be long FNMA, etc. was dead wrong and FNMA has been brutally crushed since, to say the least. Let’s hope you were eating dinner and not watching that show… or you are probably eating generic tuna for dinner now. I would take that call and roll it up in a nice neat ball….and swish it.
The issue on housing is not like hitting a bottom on a stock and reversing. The issue is affordibility. In CA for instance, affordibility dipped below 10% or in that range, at one point. That means that ONLY 10% of the of the population could afford to pay the mortgage on the median priced home. The reason for this was the explosion of “exotic” mortgages that led to the “paper” housing boom. Prices were not supported by fundamentals and still aren’t. Historically, ALL housing booms were nearly 100% correlated with incomes. The only exception to that was the most recent boom that was “created” by changing the paper that determined prices - temporarily. SP Schiller housing index once again showed record declines in prices…..
I said a year ago housing and related stocks were going far lower, I said it again 6 months ago, and saying it again - NO bottom. Even in the very unlikely event that we have seen the bottom, to get excited about that sector you would have to see improvement. That isn’t happening anytime soon. If a recession worsens, it won’t happen at all. This is at least a 5 year problem I believe, possibly longer, not 1 year. The rally in this sector is short covering, nothing more. Those stocks are massively short and the easy money was made…so they are taking some off the table. It is as simple as that.
Stocks that I have mentioned to be careful long….
March 24, 2008 1:12 AM
I have mentioned a number of stocks in the last two weeks to either avoid long, be VERY careful long, or to flat out short them. All have got crushed in recent days.
JOYG: I said short it the day after it made an all time high of $72. Today $62.04
WLT: I said short it the day after it made an all time high of $61.20. Today $54.10
CHK: I said short it (twice) after it made all time highs at $49.87. Today $44.29
MON: I have strongly said avoid, avoid, avoid a number of times….it has plunged to a low of almost $90 Thursday
AEM: I said it was an implosion waiting to happen and to wait for a short signal. It has plunged from a high of $83.45. Today $67.19.
These are all moves within ONE week…and shows why you will eventually lose “following the crowd”, especially the crowd that is making raging bull noises on tv…. If you had bought all of these, you would be down over 15%….in ONE week….not good.
That is why I said short, avoid…or both……….. and Cramer was screaming long on both CHK and AEM….hmmm
Why You Can Never Win Listening To Talking Heads
March 23, 2008 4:48 AM
We give you firm numbers on trades/investing to be long or short based on what I see traders likely doing when that level is reached or exceeded. To be fair, Cramer and others with millions of listeners cannot do that. Why? If they did, the professional traders would simply trade against them if they wanted to take it in the other direction. Bsically, they would slightly exceed that number and “whipsaw” all of their listeners by taking out their stops.
Therefore, tv personalities like Cramer, are at a huge disadvantage in trying to give their listeners sound trading/investment advice and cannot say “buy it here unless it goes below $82.00″. That is assuming they are even trying to.
On the other hand, if StockBlade says “short AEM at $80 with a hard stop at $82.50″, we do not have enough of an audience to gain the big “player’s” attention…. We are playing their game….without ruining their game.
Cramer discussing AEM: Don’t like the food here? Here is another BIG plate….
March 20, 2008 4:00 AM
A caller called on AEM tonight and asked what to do with AEM as he just bought it yesterday. Cramer’s advice….buy more as it falls.
My advice would have been to sell it yesterday at $80 and let other’s hope. I would have said short it in reality if I had been watching it.
He still was pounding the table that gold is going to $1600. It might, it might not. I have no idea and don’t much care one way or another - today. Gold could go to $1600 or it could go to $500. All I know is that yesterday the market said sell AEM and/or short it. My readers would be out of AEM at $80, his would be long at $68 and falling fast…..
And yesterday was the worst possible day to buy AEM as the chart was screaming to short it. I honestly feel sorry for the caller who had listened to Cramer, especially since the advice is to hang in there and buy more as it falls. As it falls? Are you kidding me? Too bad that guy didn’t read StockBlade.com, he wouldn’t be in that trade.
Doubling down or buying more when you are WRONG is like eating at a restaurant and hating the food…and they offer you another BIG helping….
Commodity Based Stocks…
March 19, 2008 9:16 PM
I said last night that commodities looked like they were going to roll over here. They all got BLASTED today. I said roll over…they rolled over and died. But it is a worldwide commodity bubble, IMO, so the plunge didn’t surprise me. That led to the market slide today. The only thing that has held this market up….the only real market strength has been commodity based stocks…oil, gas, corn, etc.
That was another reason I said to get short CHK. I was simply waiting for the chart to confirm the entry point to short it (again) and this morning was it…
Cramer was jumping on the table earlier this week saying gold was going to $1600 and to buy gold stocks, etc. Long term, who knows….but I do not trade hype or hope.. (my theme song, if you have not noticed)… All I know is AEM is down 20% plus in two days and his lemmings are getting CRUSHED on that trade….. My earlier posts said to avoid it and wait for another chance to get short…. 20% in two days? That is a bad decade let alone 2 days…
I watch the market to see what is really going on….you can watch tv if you wish…
Fast Money and Talking Heads - what comedy
March 19, 2008 9:04 PM
I like to watch all the talking heads just so I can comment on them and possibly trade against them if I see something… and for pure entertainment value in trading against them…
I should have writen down each day and their nonsense on Fast Money for the last week…but they LITERALLY have changed their tune EVERY day…I mean it is comical.
Remember the huge rally last week and what Cramer was yelling? “This rally should last weeks” or whatever. All the Fast Money boys were jumping up and down all excited… I said…hmmm…I see one more day….it plunged 2 days later.
Last night, they were all pounding the table …long, long, long…we hit the bottom…this is great…bla bla bla.
What did I say? Not so fast….I have never seen a bottom without a reversal off the SP low…NEVER. So as I have mentioned…trade the market, but careful on the kool-aid.
I am not saying fight the tape….but to jump up and down and then come on today after the market gets pounded and have them totally changing their tune every single day is comical.
CHK - AVOID long near $48 -$49 IMO
March 18, 2008 12:42 AM
I said to short CHK on Friday as I noted. While that quick trade is over…I believe I would look to get short this stock again soon. The downtrend is too severe and chasing is generally a bad idea.
I would look to get back short this stock as close to the highs as possible with a hard stop above the all time high. That is if we never take out todays low first ….
Natural gas made a reversal, which should put a lid on price for some time, and if I were a natural gas trader, I would have shorted it today near 10 and it plunged BIG. I suspect traders of natural gas might cover some shorts as it dropped huge and look to be short again near $9.75 to $10…but just a guess. But again, I have never attempted trading commodities…but thats what the chart looks like to me….
Winning Trades - WLT, CHK, and JoyG
March 17, 2008 9:18 PM
I had 3 stocks that I said were shorts and or sell from this weekend, Chesapeake, Walter Industries and Joy Global. All three were winners. Even if you simply sold the open on all 3, you were up 4.18%, 4.29%, and 3.31%.
Considering the Dow was up and the SP only down slightly, 4% in a day is nothing to sneeze at. If you would have sold bounces, you would have made more than that…but im simply using the % down for the day…
Ohh and all three were at ALL time highs on Friday….. :o)
Some may think that it was solely because of the market, but the Dow finished positive while both of these stocks got punished.
WLT - down $2.51 (4.29% ) off a high of $59.04. I said to get short this stock in the $60 area AND the low was $53.73. The high was made pretty early…so over $5 profit was possible on this trade today…. 8%.
If i were in this trade today, short term charts would have told me to cover it around $55….although it still looks weak here.
CHK: Also made the high early $47.20 and fell to a low of $45.19. Short term charts suggested to cover the trade around $45.50 if you were taking this as an intraday trade. Down 4.19% for the day.
I will look at the charts again and see if there is another short coming on these and where the number is….but both look lower right now…
I also mentioned that Cramer said long CHK on Friday…I said short it on Friday…. oddly enough…I was right, he was wrong. …so far anyhow. I was a little more cautious on CHK than WLT because I thought his lemmings might blindly buy it today and artificially push it higher…
But i wanted a clear head to head trade against him and was waiting to take him on…on a stock that was blowing and going….. and everyone alive said BUY, BUY, BUY…..I said SHORT it.
That was straight up…head to head…same day calls…on a stock at all time highs. That is what I wanted. My readers are cashing a check and his listeners are writing it.
It isn’t me…I just suggest doing what the market “might” be saying…….
Cramer on CHK - Chesapeake Energy
March 14, 2008 10:16 PM
Cramer just said he loves natural gas stocks here along with CHK. My take? Be VERY careful long this stock. It has to clear todays high. If not for the market in general reversing early and causing this, I would definately say short it right here.
With that said, I would consider shorting it in the $49.50 range here, if you can get filled, with a hard stop above $49.87. The risk reward is too good to ignore on that trade…
Cramer on NOK
March 13, 2008 10:50 PM
Cramer just did a segment on Nokia…and said start selling it. Well better late than never. If you would have asked me to look at this, i would have told you to sell/short it on 12/28 at $38.51. I would also have said sell it near the high made on 02/27 of $38.64. To be long this stock, it had to clear $39.39. So definately would have advised against being long in that area.
But his call is on what he believes will be bad fundamentals going forward….I read charts. Hmmm…I would have got you out…TWICE 20%-25% higher.
Even if it cleared $39.39 I would still not buy it as it also has to clear $42.22 to be long up there. So any pop from clearing $39.39 would be short lived.
Would I take Cramers advice and sell it here? Probably not as it it is farrrr too late and way too close to reversal lows. I will admit he said sell NOK into a rally…. I do agree i would unload this stock on any rally. It should not clear $37 this month.
Thanks for the input JC, but a sell at $38 would have been a little more helpful….
When do I get a few mill and a show….
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