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.
WLT: Rangebound Likely
August 5, 2008 10:13 PM
WLT made an important low today. It is likely to trade within $81.72 and $111.99 until one of them clears here. I strongly warned to avoid being long before as the move was not supported and it got crushed, to say the least. Anyhow, it should be rangebound here for a while, if you can consider $30 a range.
WLT Get’s Crushed As I Have Been Warning - Cramer Listeners Get Hammered Yet Again
August 4, 2008 9:59 PM
I have been warning about chasing WLT higher as I viewed the move higher as marginally or not at all supported. In addition, I personally view being long a coal stock with a 50 PE as complete foolishness, but that is my opinion. I posted over a month ago that I believed energy stocks were trades and not investments, and nothing has changed my view on that. In fact, most have got completely crushed since that view was posted.
On 07/31 Cramer apparently was blowing his bull horn on WLT and mentioned more coal capacity for them or something like that. What did I say - NO. I may have looked dumb when it ran up after earnings but look a little bit smarter when it plunged over $18 today and it reached a high of $109.42 on Friday. Like I have long mentioned, WHY would you be long a stock at $109.42 when it has to clear $111.99 to even consider being long? It makes no sense and today proved that view. About time the market cooperates and does as “it should”.
WLT: No Clarity Here
July 30, 2008 11:41 PM
WLT had made a huge move after earnings. Earnings were strong, I will concede the point. However, as I have been “pounding the table” lately, you cannot be long this range, IMO. It made a high today of $106.78. it has to clear $111.99 to even consider being long here and even then it could reverse again. Like I have long mentioned, why be the Lone Ranger? Let someone else do it. My views will never change - ever. ONLY be long or short where there is complete clarity. We do not have that here, obviously. I am not saying it will fall. I am not saying it won’t. I am saying I do not know.
The problem with this stock is there is one and only one clear point to be long, IMO, and that is probably $90.04. The gap higher after earnings was not that large, so I am not even sure of the significance of that low, long term. My views on this stock were not to short after earnings, but to avoid chasing much above $100 as the risk appears high. Not to mention that I am possibly the only person alive that is not a fan of being long coal long term. I still believe coal is exposed to many pressures from wind and nuclear energy. I simply see no reason, on any level, that coal can march higher long term considering wind power can (and will) generate power far cheaper than coal at these levels.
Point being, where is the upside in coal? I do not see it.
Earnings: WLT Beats After Hours - Avoid Chasing
July 28, 2008 11:30 PM
Walter Industries soundly beat estimates after hours with earnings of $.94 a share. That is a huge number compared to the consensus of $.57. My first question is how ridiculous the so called well trained analysts are. If there was ANY chance of them rolling in with 57 cents a share the stock would have been halved overnight. Obviously the market knew there was almost no chance of that happening.
At any rate, there is no clarity on WLT for a variety of reasons. The chart clearly says avoid strength below $111.99 and $103.90. In addition, are these earnings likely to continue to accelerate if coal prices go flat to down? I do not know enough about their business, so I can not logically comment. However, it seems to me that long term coal (and energy prices in general) must go lower, as I have long held. Either prices fall because of a weakening economy or they fall because higher prices cause a weak economy. I see no other possible outcome. Cramer will likely be blowing his bull horn on WLT after earnings, but haven’t watched it ( I rarely ever do). But it is an avoid much higher, IMO.
In addition, I view coal as exceptionally vulnerable to alternative energy - far more than oil. This is because it is primarily used to generate electricity. Major wind generation power is coming, along with the possibility of nuclear. If the run in coal isn’t over, it likely soon will be. I would not be a long term investor in anything coal related. Wind and nuclear is likely 2-3 years out, possibly longer, but one or the other or both is coming eventually.
07/29 Close Update: Well, the size of the move surprised me. The fact that it rallied did not as the open was clearly bought. I still say extreme caution much higher near the numbers posted as that was the intent of this post to begin with. I just didn’t think it would make it near $100 in 1 day. Today’s 15% spike to $99.26 makes it appear that i am wrong on this stock. Perhaps I am. But I am leaving this view up as I still believe it is correct and I do not want to be confused with a Monday Morning QB. We will see soon enough.
WLT: My Call To Not Chase WLT Long Proves Hugely Accurate, It Gets CRUSHED
July 2, 2008 10:21 PM
Wow. My call to not chase WLT long as it was not “justified” in taking out the high was rather …hmmm…good. It made a new high of $111.99 and then plunged almost 20% to close at $89.32. While I have been calling this stock a bubble for a while, (even when Cramer was blowing his stupid bull horn) I never imagined a new high plunge like this. As far as I can find out, there was no news AND oil was up big. Difficult to explain other than once it made a new high and reversed, the selling pressure gathered steam and selling just went crazy. I have never seen a 1 day reversal off a high like this on no news. Never.
This is why I have made the case, including yesterday in fact, to NEVER chase a trade unless you are 100% certain. If it makes a new high, it “could” reverse at any time. If it does and you do not understand what’s happening, you will get crushed.
The frustrating thing was I strongly believed when I had made the call to short it, that it was going to $88 area and the longs were going to get punished. Then the dollar plunged after the Fed, oil made new highs and I said I would cover the short and take the profit. The next day WLT skyrocketed. It “appeared” to be short covering, but wasn’t sure.
This is also another reason my trade opinions are not a true representation of the value of what I say. Many of my calls are “caution”, “avoid”, etc. Those “calls” do not show up in my “stats”. They are like someone making a hard slide into second base and breaking up a double play. It never is in the box score, but might have been the reason you won the game. Capital preservation is FAR more important than making a profit. There is always another trade - if you have money.
WLT Skyrockets: That’s Why I Suggested To Cover
June 27, 2008 5:45 PM
WLT skyrocketed today as I thought it might do yesterday. It tried to reverse several times off the low yesterday and couldn’t do it, probably because the market was getting crushed. I am a little surprised that JRCC did not make a similar type of move. You have to be very careful when trading commodity type stocks as it is like there is constantly breaking news. In general, I would say it is a mistake for most people to attempt to trade them because of that. My call made anywhere from $6 to $10 in a couple of days, depending on where someone took it. If they had taken it several times, then would have made far more, obviously.
But once I saw the dollar open Thursday, I thought oil was “likely” to skyrocket and thought WLT was likely to reverse off any weakness. That is why I posted to NOT short it further and also I mentioned in my intraday comments that ”I would personally cover here”.
WLT made a low today of $95.75 and then skyrocketed to a high of $109.15. Incredible move, to say the least. I would have said to go long, but it was far too difficult a trade and I was not certain. The volume was huge today. Shorts and longs likely saw what I saw and everyone scambled. I just looked at the volume chart and the vast majority of the volume came once $107.97 cleared. Shorts scrambled to cover. Never doubt the significance of numbers.
This is why trading is not just simply saying “lower before higher”. You have to understand what is going on and what may happen and why.
Going forward, I would not chase WLT long here. I do not believe it was “justified” in taking out the high and appears to be short covering. In addition, I have no firm number to be long. Leave it alone.
Dollar Getting Crushed Causing Oil To Spike. Do Not Touch WLT Here
June 26, 2008 9:08 AM
Do not short WLT here. The chart says it should go lower before higher, but the dollar is getting crushed and causing the spike in oil this morning. I am concerned about this and it is difficult to say where we are going here on energy and commodity stocks because of the dollar. As i have mentioned, news can and will change the dynamics of supply and demand and if the dollar collapses i am not exactly sure what will happen, but oil will likely skyrocket.
The easy money on WLT has already been made. I personally would NOT hold a short position on an energy stock overnight anyhow. The dollar and oil is simply too volatile. They are trades and exit, IMO.
10:53 Update: It spiked down and reversed as I thought was possible. Like I said before the market opened do NOT short WLT here - LEAVE IT ALONE unless you are a VERY good trader, IMO. I would personally have covered any short on any weakness here because of oil and I am not certain where it will close today. It could go either way, IMO. .
WLT Short: Why Trade Call Took Guts
June 26, 2008 1:16 AM
My trade call on WLT took guts because it is not like a normal stock. It trades on a commodity and as we have seen, commodities can change rapidly. if this was a “normal” stock, it would be $90 already, but it isn’t. I just wanted to go out on a limb and make a call that nobody else will to prove a point. I watch this stock a great deal and feel “comfortable’ enough with it that it will do as it “should”. That is why I made the call. I also glance at the oil charts periodically to see where we are. I do not pretend to be a professional, nor an oil trader, but I do know enough to know where oil is “likely” to be, short term, unless news.
There is a reason oil has been sideways for a while now. It is the high and $130.75, I believe. Until one of them clears, I think we will see more of the same. But is what I see.
There are other stocks, like VLO for example, that repeatedly do not do as they should, and I generally avoid commenting on them, unless I see something.
Point being, I called the short at the all time high in an obvious bubble situation. Readers could have banked about 20% if in and out of the trade in a couple of days. Not bad for an amateur in probably the most riskiest sector - energy. Calling a trade on financials, for instance, would be FAR easier as it is less complex.
Boom Shaka Laka: WLT Gets The Hammer
June 25, 2008 12:58 AM
I thought I would take a moment and gloat as I try and be perfect on my site, although that is not possible. WLT cooperated today and plunged $9 off the opening high early before recovering a bit. 9% in two hours works out to a decent return annualized I believe, but haven’t done the exact math.
I also “mentioned” that I would cover the early plunge as I thought the market would would try and reverse off the lows in my intraday comments. Hmmm… it did. I did not mention that I would have ”considered” shorting it again below today’s high again, but that was the trade today. It fell again another $4 plus. There was a reason for this, but I cannot make intraday calls on each stock 24/7. I feel like the chess master who moves around to 20 players and has to make a move on each board and be 100% correct.
Hedge fund managers make millions for making 10% returns a year in a down market? My one call made 10% today alone. If that is the case, hedge funds please email me. I want a $1 million dollar signing bonus and twice what your top person makes. Thanks.
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