Financials: Held Important Low
August 20, 2008 7:09 PM
After the close of 08/07 I said I expected a reversal attempt on ”further weakness” and it skyrocketed. I had also mentioned that I expected XLF to hold $19.25. Today it tried it again and got to a low of $19.61 before reversing. I still believe that number is key for the group. It is the only low I like for the sector (no, I do not like the July 15th low the same as i do not like the same low for the SP). I believe we will ultimately revisit both issues, I just do not know when. Theoretically, the July 15th low is NOT the low on the SP. Period. Anything is always possible, but I will believe it when I see it and it has not been proven correct, as of yet.
ADI: 08/15 Comment “ADI Appears To Be A Short” - Down She Goes
August 20, 2008 7:01 PM
On 08/15 I said “ADI appears to be a short here under $33.53″. Hmm, closed at $29.29 today. I can’t take credit for all that move as there was a warning or something today from them. Anyhow, I also said “the sma’s may hold the stock here not sure, but you certainly cannot be long here”. So I gave fair warning, but won’t take credit for making a “trade call”.
XOM: Value Trap
August 14, 2008 5:54 PM
Exxon has been trading sideways now for almost 2 weeks. My philosophy on this type of action is the trend is likely to continue. Some commodity type stocks did make firm reversals and took off, like MON, etc., but the action on XOM strongly suggests another push down. It is an avoid as I see things. I know the PE is exceptionally compelling and all value traps have that same thing going for them. But the dividend is only 2%, sentiment on oil is obviously negative, etc. I just do not like it here.
The short was way up at the high. Do you see why this should be a pay site? I would have seen that if i was spending 10 hours a day on this instead of working. It made a “CHK” type of a rejection off the high and down she goes. Speaking of CHK, it held my “must hold” point of $42.15 by a nickel on 08/11 and up $4 off that. Not a bad risk/reward trade. Lose a nickel or make $4. Opps, charts do not matter, my bad.
WLT: Hammer Time
August 12, 2008 7:46 AM
If I am not mistaken, Cramer was blowing the bull horn on WLT on 07/31 because of increased coal capacity or something. Bla, bla, bla - who cares. Unfortunately, that isn’t how the market works and nobody cares. I said at the time, and still maintain, that the stock was an avoid long at best, a short under the high, at worst.
It cleared my “must hold” point of $81.72 yesterday and made a severe spike to a low of $76.80. It may and try and hold the 07/24 low area of $74.20, but I do not see that as an important low and was very skeptical of the move higher off it earlier. This is why I pointed out, on several occasions that the move higher was not “supported”. Run from the bubble, as I see things, but I would not chase this thing short down here. Never chase a trade.
WLT may become my new Cramer whipping boy stock to replace AEM. AEM was down another 3% yesterday - yawn. Someone wake me when it is down 75% from the high when Cramer was raging his bull horn and BUY MORE nonsense. I want my own show.
UPS: A Complete House Of Cards
August 11, 2008 6:50 PM
I mentioned that my opinion was to short UPS a while back. While that trade “worked” for my 3 day window, it has since cleared that point to the upside. My opinion of this stock is AVOID long, to say the least. It has been rising 100% on falling oil and the chart strongly suggests it is a complete house of cards. Once this thing turns, it could get ugly. Leave it alone.
RIMM: Finally Clears Gap Down
August 9, 2008 7:11 PM
Well, it has been 1.5 months since RIMM gapped lower after earnings. Friday, it finally cleared the gap high of $128.98. It backed off that high on Wednesday and exploded to the upside Friday once it cleared. Why? Because there was some short covering, most likely once it cleared.
It is difficult to know how high it will run now. Techs tend to move higher this time of year as traders want to get a jump on holiday season sentiment. People always hope for a “good holiday season” and tend to bid these stocks up in August. I also noted when it fell, that RIMM has never clearly rejected a high. Therefore, there really is nothing to clear to the upside of significance. I would not be shocked if it eventually makes a new all time high because of that. There are likely to be some sellers near $140 because then the gap will be “filled”.
Update: RIMM was a short under $135 today. I saw it last night, just forgot to post it. I am not a fan of RIMM here anyhow as there are likely to be sellers once the gap fills, as mentioned.
CHK: A Lesson In Sentiment
August 9, 2008 8:46 AM
I mentioned over a month ago that CHK was a short under the high. Period. I also said at least 2 months ago that I strongly believed energy prices would fall - one way or another and that “all energy and commodity stocks were trades, NOT investments. I further went on to say that all energy and commodity stocks would be far lower than they are today. Considering that those two sectors have been ripped in half since, almost literally, my call on that was right on.
Here is a lesson in sentiment. CHK continues to fall regardless of what they report on earnings and/or drilling. Why? Because the “players” have been rotating out of energy and commodity stocks for some time. Remember my supply and demand motto? If there are more sellers than buyers, it will fall and vice-versa. It doesn’t matter what the results are. If people are selling, then they are. People refer to that as sentiment. I refer to it more simply as supply and demand.
On 08/04 CHK got an upgrade to strong buy by one firm. Zacks had an article on 08/06 that CHK Shows Strength. I have one word, well several to say about all that - bla, bla, bla. It is all a bunch of meaningless crap.
I am pointing this out as many people may be long CHK and shaking their heads as it continues to fall. Why? Because people are selling energy and commodities. It is as simple as that. It is the same when I called the top on AAPL in 12/07. A friend wanted to buy weakness in AAPL as “they are a great company” I said “so? It doesn’t matter if they cure cancer and save the world all in the same day, the stock is a short, not long”. That statement may have been a bit dramatic, but I was trying to make a point. Do not ever go against sentiment.
This is why I strongly advocate the charts to provide indications of supply/demand at various price points. It provides indications of what is going on. For instance, I began to notice over a month ago, and mentioned as much, that energy stocks were falling with rising oil. This tipped me off that the players were selling as that should not have been happening. The sentiment had changed, i.e. people were selling.
Stock Call Revisited: PFE
August 8, 2008 8:25 PM
I said on 07/29 that “if the Dow low was going to hold, PFE should not trade much below $18″. Unfortunately it only hit a low of $18.34 that day as one of my brothers placed a buy at $18 per my opinion. Market was ahead of my game, apparently. It is about 8% higher since, better than a “Cramer stick in the eye”.
I wonder if Cramer has made any comments on AEM and gold now that AEM is $47.32 with no sign of a low anywhere to be found? If you recall, I have mentioned MANY times on here he was blowing his bull horn on AEM the day AFTER it hit it’s high and I said SHORT. Those poor listeners, if still holding that crap, are down about 45%. Nice call.
If I am ever down 45% on ANY of my calls, I will shut this site down, and never look at the market ever again in my life. Period. Then again, that will never happen as I have numbers to go along with my madness - he doesn’t.
With all that said, be careful chasing PFE higher here (same as the market). Wait for a pullback to be long, if not already.
Market Update: AXP Debt Put On Credit Watch By Moody’s
August 7, 2008 3:45 PM
We were all set to put in an open low. Late in the day Moody’s put some of American Express’s debt on credit watch for a possible downgrade and all hell broke loose. I have been warning that the SP was a total and complete house of cards, but we did have a “decent” low put in early on today at the open and the AXP news was likely the only reason it cleared. I couldn’t figure out what was going on as it “shouldn’t” have cleared from what I saw. Well, CNBC comes on AFTER the low cleared and broke the “news”. Nice to have news after the traders.
I obviously need something for real time news as CNBC gives “news” far after the traders already have it. Not good.
Stock View: Fannie And Freddie Have Little Value - But
August 6, 2008 9:00 PM
I warned many moons ago that if FNM was not a quasi government sponsored company that “any price above zero is too much”. It has been a horrifically managed company, to say the least, and their coming losses would easily put any “normal” company under, most probably. This nonsense that taxpayers are only exposed to $25 billion is total and complete nonsense. I would be shocked if the losses do not hit $400-$500 billion, not $25 billion. I mean it is just complete nonsense to even possibly think the losses will be contained to $25 billion. I do not even think it is possible in “best case fantasy land scenario”.
The thing that is the unknown here, and the only reason these stocks are not near zero, is what impact will a government bailout have on the equity? I believe nobody clearly knows, as of yet. If the government takes ownership in the company in direct relation to the bailout required, I am guessing the stocks have little value. If their losses do not FAR exceed $25 billion I will promise this right here - I will never post on any stock ever again, lol. It is complete nonsense.
Hmmm, but if I am not mistaken, I did say FNM was near worthless FAR before anyone else, even so called analysts. Oh and Cramer was blowing his bull horn on this stock a year ago. Nice call. When do I get my own show making $5 million? Then again, my listeners would perhaps not donate their money to Wall St., which would defeat the purpose….ha.
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