WLT Update: Getting The Hammer Early
June 24, 2008 10:22 AM
WLT is down over $7 off the opening high, as I warned last night. Yesterday was a complete head fake and i said the trade was to still short under the high today. Bingo. Opening high $106.29 and down she goes.
Trade Call: WLT And Where We Are At
June 23, 2008 10:52 PM
The move higher today was a trend break from the sharp sell-off we saw on Friday (that I called on the trade). The trade is still to short below the high, IMO. We could clear the high without going lower first, but that happens I would say less than 10% of the time. The market is risk/reward and that is the ONLY trade on WLT here. That is why you saw the very, very low volume today and it backed off the high. People buying today at the high on WLT either know something, or know nothing, and I suspect the latter. The odds are still great they are going to get the hammer.
If and when the trend higher breaks, the pressure “should” be on below the high. If this was a normal stock and not commodity, I would say a sell-off tomorrow would be a given, depending on the open. But the commodity stocks are a little more dicey as you almost have to know what is going on with the underlying commodity as well.
Keep in mind, as most readers know, I think trend trading is silliness. You never know where you are right, and where you are wrong. And my view of trends is always temporary, unless supported. Any move higher on WLT is NOT supported. Could it break the high? Yes. But buying near the high when it is not supported would be less than wise and the odds are FAR greater you will be crushed than make money. In addition, if it does clear the high, there is nothing to stop the fall once it turns again.
WLT: Trend Break
June 23, 2008 12:06 PM
We had a daily trend break at the open today on WLT. Once it was clear that was going to hold…I would have covered the short, and then wait to short below the high again tomorrow, depending on the open, IMO. This move higher is “probably” bs, but I think the failure of oil to fall is giving some hope here. Commodity stocks are tricky as they can move with no apparent reason because of the underlying commodity - so you have to be far more careful with them than a normal stock.
Yesterday’s Trade Call: WLT Get’s Hammered
June 20, 2008 10:46 PM
My call to short WLT today was dead on as it fell 2.82% and you could have made 5% if you had simply shorted the open. Good call considering the market was down about 1.8%.
JRCC did not cooperate. I am not familiar with this stock, I had just responded to a reader to see how it looked. It wasn’t really my call, but more of a response to a question. I believe there was an upgrade or something on it today, not sure. I need to follow it more to get a better feel for how it trades as i have never looked at it before. I still would not be long the stock here until it clears the high. Well, I wouldn’t buy it no matter what as i have no idea what the valuation is and this hype seems extreme regarding coal.
I shouldn’t post a position until i know a stock well. I watch WLT a lot and felt pressure today was very likely. I have called the short on this before and it fell like a stone.
WLT: Short This Bubble
June 20, 2008 12:20 AM
If you have been waiting for a chance to short a bubble stock, tomorrow could be it. If the market had not closed positive, I would definately say short this thing right here. Anyhow, the trade is to short WLT right here with a hard stop above $107.97. I have been watching this hype get out of control and wondering when and where this would end. The stock is grossly overvalued by any measure, IMO, and it is a short. I see nothing to stop the fall well below $100.
How many sites or Talking heads will say short a stock at the all time high? i have done it on here many times, and thus far have been correct. It is short, just have the stop in.
If you are an options trader, you may want to look at the puts right here.
Avoid The Hype On Oil and Oil Stocks - Key Number On Oil: 130.50
May 23, 2008 8:37 PM
As I have mentioned, the hype on oil and energy related stocks has become extreme. Someone will eventually be holding the last card on this nonsense, I just do not know when. WLT is extremely overvalued by any measure. Anyhow, i never have traded oil, but oil needs to clear $130.50 to the downside and we should see a possible severe spike lower if that occurs. That could give the market a “relief bounce” next week.
Calls To Avoid AAPL, WLT and GS - Bingo
May 19, 2008 11:55 PM
I should have called the short on AAPL, my bad. I must be getting soft in my “old age”. I saw the short, had the number, but thought the Appleheads may try and pierce it in a lifting market. They couldn’t and down over $4.00 today and down over $5.00 today from the high. It really was an easy risk/reward trade, so I aplogize for not being more aggressive as it really was a gift to short it.
As far as Walter Industries, it was merely a “hunch” that it was extended, over hyped, and way over valued. Bingo, down over 4.00 also. Unfortunately, it did not make a new high and then sell down, so i still cannot call a short here. The trade will be long, I am just not certain where yet. And i am NOT a fan of the valuation.
Goldman traded as high as $189.42 today and quickly sold off to close at $184.40.
But I was correct on all three. Just “lucky” yet once again apparently since charts do not matter…., so you are welcome, lol.
Do you not yet see the market players do not guess? There are hundreds of millions of dollars trading - they do NOT guess. Joe Public guesses and hopes, professionals don’t. I am trying to provide clues here…. please follow along…
Avoid The Euphoria Surrounding Walter Industries
May 18, 2008 11:22 PM
WLT has skyrocketed based upon their coal production, and possibly hype from Cramer. Avoid chasing it here as the hype and valuation has become extreme. There is nothing in the chart that says get out or short it, but anytime stocks become extreme, the risk/reward is simply not worth it.
If you wanted to be long this stock, it should have been once our SB number short of $74.18 was cleared. This stock will once again reverse, I just do not know when. One thing you HAVE to learn to invest or trade - the pro’s never chase.
Caution on CHK And WLT Proved Correct Call, They Both Got Hammered
April 29, 2008 10:35 PM
As i said last night “if not for the Fed meeting coming, both CHK and WLT should be a short right here”. Both got hammered today. Should have just made the call to short it with a hard stop at the highs as I smelled trouble. My only concern was the fed meeting and the market direction is not certain after, and I like to make calls where i believe there is a high degree of probability. I have repeatedly said to avoid WLT here in the last 3 days however, and that call proved correct. WLT was down 4.84% and CHK down 4.55%. Not a bad day’s “work” as that is higher than an entire YEAR return in a money market…. in about 8 hours…..
While it is difficult to know the direction here, extreme caution is in order. We have to clear Monday’s high in the SP to be long the market here, and the highs on both CHK and WLT are an issue, until proven otherwise. WLT has earnings May 1, so best to let that play out first, IMO.
If we sell down after the Fed, it looks like we need to clear the 1370 area to the downside to put pressure on the market. I will update once I see the reaction.
CAUTION: XLF, WLT, CHK
April 28, 2008 10:36 PM
If not for the Fed on Wednesday, I would say short WLT, and CHk right here and extreme caution in this range on XLF. AAPL cleared the possible reversal attempt attempt early on and took out that play. it had to clear Friday’s low to “technicially” put a short on, and it never even came close. Not exactly sure where this strength in AAPL is coming from as their numbers do not support this strength, IMO. But you have the “AppleHeads” that want to own this stock. Volume has dropped dramatically in the last 2 days on Apple however, so this rally is weak, at best. AEM fell again, not a shock at all. The Cramer heads are going to be beat to BK on his call to be long at the highs. If the dollar firms, AEM could easily see $35. Big if, I know.
The Fed decision on Wednesday takes all plays off the board, basically, as it is going to move afterward, most likely. But be careful here.
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