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Dollar Bottom? Careful Long ALL Commodity Based Stocks

April 1, 2008 6:40 AM

The dollar may have put in a near term bottom yesterday and caution on all commodity based stocks here, IMO. Commodities have been an inverse dollar trade, not fundamental based. Any strength in the dollar should pressure commodities off their bubble highs.

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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

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Monsanto - Long Term High Appears To Have Been Reached

March 22, 2008 10:57 PM

I have warned against being long MON for quite some time. The short/get out point was up near $120, as I mentioned several times. I am not sure if it is going to plunge here or not, but it is certainly a possibility. The new reference point to be short appears to be $113.71. If it gets in that range again, expect selling pressure and or shorts.  

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Monsanto

March 18, 2008 11:49 PM

Since the market is on steroids ( and probably a few glasses of it’s own kool-aid), I wanted to look at where the likely shorts are coming on some stocks.

MON is a short below $123.80. It is currently $112.08. Let the dog have it’s day or two or three….but look to exit this if long near $120 and/or be short.

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MON

March 14, 2008 1:44 AM

I have commented on Monsanto many times via this blog and emails so thought I would take another look tonight when I heard some hype on TV about it. Normally I consider TV hype as about a week from the time to short it once they have all their suckers…errr clients… in the trade and they take the other side…but let’s look.

I am not a huge fan of this stock in the $120 range, and have made that clear many times…and correctly so. But here is the bottom line. I said long this stock above $93.22. I also said short this stock twice and it plunged faster than the Titanic both times. Just those two short calls were about 40% profit in a total of 6 days. So you have to be careful on these bubble stocks as someone eventually will be owning a $150 stock at $50. So if you trade this stock, you better know what you are doing….

Here is the trade….if it clears $111.57 it should pop to the upside. You could scalp that for a few bucks long. It has to clear $123.80 to be long in that area so you have to be very careful here, IMO. Even if it cleared $123.80, it would also have to clear $129.28 to be long in that range.

So know your risk in the $120 plus range….and ignore the nonsensical hype.

Ohh, and if it clears $93.22 before $129.28…the stock is in for BIG trouble long term, IMO.

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Monsanto

March 9, 2008 5:56 PM

I have mentioned many times that I viewed Monsanto as part of a building global bubble in commodities and an investment is a very risky proposition. But my posts are not about buying stocks for 10 years - it is about where the trade is currently. The importance of a potential bubble and very stretched valuation levels is that hard stops HAVE to be used. I also said to short this stock on 2 occasions where it plunged over $20 - $30 in 2 days….twice. I also strongly warned against buying it when it ran over $120 as to be long in that area it would need to clear the all time high. With that said, the key number is $93.22. If you want to be long MON, the trade is to place a buy at $95 (or wherever your risk tolerance is) with a hard stop below $93.22. it appears that this slide may try and stop in the $97 range but that trade would provide nearly $4 to the downside risk so I am not a fan of being long there.

If it eventually clears $93.22 it will spike lower momentarily - however, I would only scalp that trade short as it most likely will reverse again in the $85- $90 range.

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