Monthly Archives: April 2010

Special Edition: Here comes the red ink, correction begins.

Posted by K on April 28, 2010
Market Analysis / 2 Comments

It was a busy day today and when I finally had time to check on the market a big grin came to my face. A lot went on today and news blamed Greece and Portugal downgrades for the sharp drop. Nobody ever talks about the technical analysis because it is beyond the mind of Joe the Plumber.

Let’s start off with the Eur/Usd which I have closely followed since December when it broke a long term trendline.  I hadn’t looked back at it since and I was shocked.  Here is the first in a series of Special charts.

Next on the list is $TED which stands for the Treasury – EuroDollar Spread.  You can read more about what Ted is on this November post if you are not familiar with it.
WHile the spread of  0.2 is still fairly low and below the average of 0.5 the fact that it is increasing and the moving averages are making their first crossup since before the October 2008 crisis strikes me as interesting especially given the current economic situation.

While on the subject of Europe lets check out the Greek Index $GRDOW which I wrote about on April 11 and that turned out to be the opposite of what I expected. From a low of 124.17 on March of 2009 the Greek index went through the roof at 267.40 and as of close today it stands at 138.11.  Go Greece!!!

Now lets take a look domestically at  BID – Sotherby’s   which as I mentioned on March 14th’s post is Part of my indicators arsenal.  BID fell from 37.75 to 34.93 today which broke a short term trendline but also another big move would put it below the 32 mark that is the next strong support. Since the March 2009 lows of 5.85 BID is up 666% to as high as 39! That’s nearly 47% a month.  A move below 32 (20% drop from 39) would tell me to wipe the dust off my ammunition and a move under 22 (40+% drop) would just signal that Chaos is back and since this is a Leading indicator to me it would highly influence my positions.

Lastly I will leave you off with the Investing Freak Special SPX chart that I last posted on April 14th.  We hit a top, retreated a bit below the blue moving average then made a higher high at 1219 but this time it was different as the retreat didn’t land on solid ground and we fell through.

Class Dismissed.
-K

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Weekly Picks- Buy:IYR,XLF Sell:DRYS,SRS,SKF,SMN,VXX

Posted by K on April 25, 2010
General / Comments Off on Weekly Picks- Buy:IYR,XLF Sell:DRYS,SRS,SKF,SMN,VXX

This week was mostly a reversal of calls made last week, the only new call is a Sell on DRYS.
When the week moves in a range (market Zig Zagged 30 points up and down) they are called False Signals because my system is a trending one.
Nobody has called me out on my calls but this is the first back to back week that signals have reversed in my blogging days so I thought I’d clear the air :).

I will be introducing a new Feature this week. A chart to accompany each call. The charts are 3 months and they show all signals that might have occurred during that time-frame.
Red Dots means SELL and Green dots signal BUY.  Simple enough? Great Let’s get started.

Here’s a look at SPY SPDR S&P 500 ETF Chart
(Click to Enlarge, Same goes for the rest of the charts)

Upgrades

IYR  iShares Dow Jones US Real Estate (ETF)
Upgraded to BUY on Apr 21 at $52.23

XLF  Financial Select Sector SPDR (ETF)
Upgraded to BUY on Apr 21 at $16.74

Downgrades

DRYS DryShips Inc.
downgraded to SELL on Apr 19 at $6.20

SRS ProShares UltraShort Real Estate (ETF)
downgraded to SELL on Apr 21 at $26.98

SKF ProShares UltraShort Financials (ETF)
downgraded to SELL on Apr 20 at $17.32

SMN ProShares UltraShort Basic Materls (ETF)
downgraded to SELL on Apr 23 at $32.37

VXX iPath S&P 500 VIX Short Term F
downgraded to SELL on Apr 20 at $18.27

Disclaimer:
I am only giving the latest signal for the stock mentioned. Use at your own risk and make sure to take the date into consideration. If you have been trading for a while you should have realized that relying solely on the strategies of others (think Analyst Opinions) will lead to failure so please only take the signals I provide just as another indicator in making your informed BUY or SELL decision. Now go Make some MONEY!

-K

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State Street Corp. Options Fun

Posted by K on April 21, 2010
General / 1 Comment

I don’t have the time tonight for a nightly recap so I will highlight one of my trades.

I shorted State Street Corporation on April 13 because of gut feeling (always follow gut)  and sold April 20 via writing of May 49 strike calls.

Here is the chart with the entry and exit points. Here is the link to the option if you were wondering finance.yahoo.com/q?s=SPJ100522C00049000

I don’t have time for the nightly recaps but I will leave you with an updated chart that you will like. (Click To Enlarge)

1 Week play = 80% Profit.  I took profits because you can never be too greedy especially when there’s only $25 left on the plate.

Have a good night and make some money!

-K

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Weekly Picks- Buy:SRS,SKF,SMN,VXX Sell:IYR,XLF

Posted by K on April 18, 2010
General / Comments Off on Weekly Picks- Buy:SRS,SKF,SMN,VXX Sell:IYR,XLF

The Current Picks page has been updated. Have a look by clicking Current Picks here or up on the top of the page.
Below I will only mention the new signals that have occurred this week.

Upgrades

SRS ProShares UltraShort Real Estate (ETF)
upgraded to BUY on Apr 16 at $29.18     (SELL Apr 05 at $28.60)

SKF ProShares UltraShort Financials (ETF)
upgraded
to BUY on Apr 16 at $18.11   (SELL Feb 16 at $24.17)

SMN ProShares UltraShort Basic Materls (ETF)
upgraded
to BUY on Apr 16 at $34.01  (SELL Mar 29 at $34.95)

VXX iPath S&P 500 VIX Short Term F
upgraded
to BUY on Apr 16 at $19.97     (SELL Feb 11 at $31.40)

Downgrades

IYR  iShares Dow Jones US Real Estate (ETF)
downgraded to SELL on Apr 16 at $50.24    (BUY Apr 05 at $51.05)

XLF  Financial Select Sector SPDR (ETF)
downgraded
to SELL on Apr 16 at $16.36     (BUY Feb 16 at $14.34)

Notes:
URE and UYG are off my list after the splits because of charting issues.


Disclaimer:
I am only giving the latest signal for the stock mentioned. Use at your own risk and make sure to take the date into consideration. If you have been trading for a while you should have realized that relying solely on the strategies of others (think Analyst Opinions) will lead to failure so please only take the signals I provide just as another indicator in making your informed BUY or SELL decision. Now go Make some MONEY!

Have a good weekend.

-K

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Mother Nature Shorts the Market: Volcano errupts, Cramer Says the Recovery is Real

Posted by K on April 16, 2010
General / Comments Off on Mother Nature Shorts the Market: Volcano errupts, Cramer Says the Recovery is Real

Mother nature is fed up with the mountainous stock market climb and the Icelandic Volcano has finally put a top to it.
There have been many canceled flights across Europe and airliners will be feeling the effects of the volcano for at least a quarter if not more. This is one of those news items that is still not priced into the market (at least wasn’t as of 4pm closing bell) so shorting an international Airliner should yield results (British Airways or AirFrance perhaps).

This is not just a minor news article as many airports have yet to close but will have to as the ash travels farther from its origin.  According to BBC “Such a large eruption… would have the potential to severely affect air travel at high northern latitudes for six months or more.  “In relation to the current eruption, it is worth noting that the last eruption of Eyjafjallajoekull lasted more than 12 months.”

This could be a major win for global warming activists because it might cool us down according to an article in the Guardian that states “The dust can also help reduce global warming. The effect of the Iceland ash cloud will be small but larger eruptions help to cool the planet as they reflect sunlight back into space. The 1815 eruption of Mt Tambora in Indonesia produced so much volcanic ash that it triggered the “year without a summer” that brought widespread failure of harvests across Europe, famine and economic collapse.”

Now that we established Mother nature’s attempt to stagnate or destroy the economy lets turn our heads to the lovely Jim Cramer who tells us that the Recovery Is Real!
Maybe this time, the recovery is better, Maybe it’s healthier and more sustaining. Maybe this time we’ve got it right, not wrong, and Maybe the recovery will be responsible and Maybe fueled by a longer-term health in the consumer, and Maybe it will not be turbocharged bad lending.”   Now I added a few more maybes on my own to emphasize that Maybe the recovery is real and Maybe Cramer is a genius.

We know mother nature is short and Cramer is long. Lets take a look at some economic data domestically and around the world.

US Economy:

March Foreclosure Activity Highest on Record (Calculated Risk)
7 million households are behind on their mortgages. Now that the worst of the financial crisis appears to be over, banks are finally stepping up the foreclosure process again. Foreclosure filings were reported on 367,056 properties in March, an increase of nearly 19 percent from the previous month, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.

Weekly Initial Unemployment Claims Increase to 484,000 (The Big Picture)
Today’s Unemployment Insurance claims “unexpectedly” spiked to 484k vs. a 440k consensus, and were 24k higher than last week. Lets get to the excuses as to why the weekly claims for unemployment insurance are not dropping as quickly as everyone would like. “A Labor Department economist said this latest rise can be pegged to lag effects from the spring holidays, including Easter and Cesar Chavez Day, which is celebrated in worker-heavy California.” If that puts a dent in employment then here are the Holidays: Thanksgiving, Christmas, MLK Jr. Day, snow storms, Easter, Cesar Chavez. Upcoming next week are Administrative Professionals Day and Take Your Children to Work Day, so fear not when UI claims breach 500k again.

Empire Manufacturing Index Soars (Econompic)
A gauge of manufacturing in New York State rose to a six-month high in April as new orders advanced and employment continued to improve, the New York Federal Reserve said in a report on Thursday. The New York Fed’s “Empire State” general business conditions index rose to 31.86 in April, the highest since October and up from 22.86 in March. Economists polled by Reuters had expected a figure of 24.

World Economy:

Greece On Verge Of Activating Rescue Package (Zero Hedge)
A senior Greek Finance Ministry official told Market News that With the call for a meeting today, Greece is seeking to iron out “immediately” exactly what the details of the joint EMU-IMF plan will be, and what fiscal, macroeconomic and other conditions will be imposed on Greece in exchange for the aid. Last weekend Greece issued $2.1 billion in Bills, which auction by the way bankingnews.gr recently reported was a scam, with half the bids being fake!

Israel accuses Syria of arming Hezbollah(AFP)
Israeli President Shimon Peres on Tuesday accused Syria of supplying Scud missiles to the Lebanese militant group Hezbollah while publicly talking peace.
“Syria claims it wants peace while at the same time it delivers Scuds to Hezbollah whose only goal is to threaten the state of Israel,” Peres told public radio.

Have a good night.
-K

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The Investingfreak Special SPX chart re-visited

Posted by K on April 14, 2010
Market Analysis / 3 Comments

Back on March 28th I posted an InvestingFreak original chart of the S&P500.  Blue line is 10SMA and It has held for a few months now but as the market heads higher it faces a few resistance points, is 1216 the absolute top (I have preached that number offline for a while now) and a good correction of 100 points upon us?  Remember that at this point all positive earnings might be faced with a “sell the news” attitude.

I don’t have time for the nightly recaps but I will leave you with an updated chart that you will like. (Click To Enlarge)

Have a good night and make some money!

-K

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Key Catalysts for the week

Posted by K on April 12, 2010
General / Comments Off on Key Catalysts for the week

Earnings season for Q1 will kick off w/AA coming Mon after the close.  PKX (S Korean steel company) will hit overnight on Mon w/a call on Tues morning.  There will be a bunch of tech results.  For the semis, watch for INTC and LLTC on Tues, ASML on Wed, and AMDFCS on Thurs.  In the internets, GOOG kicks things off Thurs night.  JPM is the first financial earnings of the season (Wed morning) and will be followed by PBCT(Thurs night) and BAC, FHN (Fri morning).  GE reports Fri morning also.

·         Credit card companies will release their mastertrust #s on Thurs and the latest short interest stats hit on Mon after the bell.

·         Congress comes back into session on Mon, w/the focus being on Dodd’s financial regulatory reform bill.

·         China’s president is traveling to the US on Mon for a nuclear summit in Washington (a meeting w/Obama is scheduled for Mon).  There could be more headlines on Iranian sanctions coming out of this Washington summit.      For the rest read Business Insider.

NBER: “Premature” to Call end of Recession
The Business Cycle Dating Committee of the National Bureau of Economic Research met at the organization’s headquarters in Cambridge, Massachusetts, on April 8, 2010. The committee reviewed the most recent data for all indicators relevant to the determination of a possible date of the trough in economic activity marking the end of the recession that began in December 2007. The trough date would identify the end of contraction and the beginning of expansion. Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature. Many indicators are quite preliminary at this time and will be revised in coming months.   Read More at Calculated Risk

VIX plumbs new low as other indicators edge closer to extremes
The volatility index ($VIX) dropped to another new low on its series of waves down since late 2008/early 2009, meaning that investors shed yet more fear to place yet less value on premium protecting against volatility. This places it at risk of a snapback along with a stock market pullback. At the same time, other indicators (shown lower down) also tell the story of the market at the edge of cresting. For Charts go to ChartLines

Feature: Check out our new Live Chat.
We have added another tab to the top of the page and for now it includes a chat where even guests can join and have discussions. Chat will have at least a few people during market hours and the more the merrier as it catches on.  Lets have some lively conversations and stock sharing through it.  Check out our Live Chat.

Have a good night,

-K

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Current Picks Updated 4-11-2010

Posted by K on April 11, 2010
General / Comments Off on Current Picks Updated 4-11-2010

The Current Picks page has been updated. Have a look by clicking Current Picks here or up on the top of the page.
Below I will only mention the new signals that have occurred this week.

IYR upgraded to BUY on Apr 05 at $51.05     (SELL Mar 26 at $50.10)
URE upgraded to BUY on Apr 05 at $8.55   (SELL Mar 31 at $8.14)
JNK upgraded to BUY on Apr 08 at $39.61   (SELL Apr 1 at $39.51)
HYG upgraded to BUY on Apr 08 at $88.31      (SELL Mar 31 at $87.50)

SRS downgraded to SELL on Apr 05 at $5.72    (BUY Mar 31st at $6.04)
REW   downgraded to SELL on Apr 05 at $20.54     (BUY Apr 1st at $21.06)

If you’ve been following the current picks you might notice above that these are reversed calls from last week. you have to understand that there are fake-outs but I only update the page once a week.  On the works is a subscription plan where i would update it for members every 1-2 days if signals changed. For now let’s enjoy some recent highlights.

Recent Highlights:

AAPL from 224.75 on March 22nd to 241.79 of close Friday.
DRYS
from 5.88 on March 29th to 6.56 of close Friday.
DIG
from 34.27 on March 30th to 37.07 of close Friday.

Disclaimer:
I am only giving the latest signal for the stock mentioned. Use at your own risk and make sure to take the date into consideration. If you have been trading for a while you should have realized that relying solely on the strategies of others (think Analyst Opinions) will lead to failure so please only take the signals I provide just as another indicator in making your informed BUY or SELL decision. Now go Make some MONEY!

Have a good weekend.

-K

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Nightly Recap 4-9-2010

Posted by K on April 09, 2010
General / Comments Off on Nightly Recap 4-9-2010

Market Summary:
DOW      +70.28 (10,997.35) Briefly Touched 11,000
S&P        +7.94 (1,194.37)
Nasdaq  +17.24 (2,454.05)
____________
Disclaimer:
Open Positions:  SRS at 5.97
___________

Nightly News Links

US Economy:

Bank Failures and Puerto Rico (Calculated Risk)
It appears the FDIC is getting closer to taking action in Puerto Rico. Three banks on the island holding more than $20 billion of assets are in trouble … It appears the remaining healthy banks in Puerto Rico don’t have the capacity to acquire these troubled banks – and most banks not in Puerto Rico just aren’t interested.

Crazy Expensive Stuff That’s Helping Push Sotheby’s Back Towards Nosebleed Heights (BID) (Business Insider)
Sotheby’s (BID) is back and the sales are as hot as ever. The auction house, a viable predictor of major market turns, is officially telling us its back to pre-Lehman levels.
Many million dollar pieces are even fetching bids twice the amount predicted, as wealthy buyers appear more than ready to spend again.
Back on March 14th I wrote an article about (BID) as a Market Leading Indicator. Click here to check it out.

World Economy:

U.K. Produce Prices Soar in March (Econompic)
Oil prices rose above $86 a barrel Friday on a weaker dollar and after robust U.S. retail sales in March pointed to growing consumer demand in the world’s biggest energy market. As can be seen, this jump is almost entirely due to the cost of energy (it has not yet fed into other goods / services) and elevated producer prices will be difficult for businesses to pass through to end consumers.

More Links on the Greece Fiasco:
1.Greek Short term debt spikes to 21%
2.Fitch Downgrades Greece To BBB-

Interesting Links:

10 Psychological, Valuation, Adapative Investing Rules (The Big Picture)
Everything cycles: Recessions turn into recoveries; bull markets give rise to bear markets. Every rally that there ever was or there ever will be eventually ends. Adapt to this truism or lose your money. – After a collapse (i.e., a 55% market sell off), most of the terrible structural news that existed before the collapse is reflected in prices. Let it go. (Plenty more good ones at the link above)

Southpark: Cartman as Jim Cramer of Facebook
Kudos to Matt Trivisonno for finding this video and finally some straight talk about China.
China is dependent on us, we’re working in order to keep Chinese people working. The Chinese think that we are suckers and are laughing at us.
Check the video below for 4 well spent minutes.

Have a Good Night

-K

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Nightly Recap 4-8-2010

Posted by K on April 08, 2010
General / Comments Off on Nightly Recap 4-8-2010

Market Summary:
DOW      +29.55 (10,927.07)
S&P        +3.99 (1,186.43)
Nasdaq  +5.65 (2,436.81)
____________
Disclaimer:
Open Positions:  SRS at 5.97
___________

Nightly News Links

US Economy:

Strong Retail Sales Prove Consumer Isn’t Dead (In The Money)
The one sector that is bucking the weakness is the retail sector, after a flurry of same-store sales reports that were very strong. Companies such as Macy’s (M), Target (TGT), and Gap (GPS) all posted double-digit increases in comp store sales, a solid showing. The Reformed Broker: ” On CNBC, a breathless Dana Telsey guided us through this morning’s March Same Store Sales numbers – against incredibly bad comps, the numbers end up looking miraculous. The bulls will make the case that this is the pent-up consumer coming out of the woodwork for good, the bears will remind us that Easter weekend came early this year and was wedged into the month’s tally.”

World Economy:

Greece is Dying! (The Big Picture)
Highlighting the increasingly troubled situation in Greece, the yield curve spread between 2’s and 10’s is now negative. Greek 2 yr note yields are rising a whopping 114 bps to 7.83% while 10 yr yields are up 34 bps to 7.51%. Greek 5 yr CDS is up 35 bps to 448 bps and now exceeds Dubai and Iceland. Greek stocks are down almost 4%. A German official didn’t help the situation by saying that their stance hasn’t changed and they will only assist Greece as a last resort. Well, that may be fast approaching but it’s looking more likely that it will be an IMF bailout that will lead the way.

More Links on Greece:
1.Goldman On Greece: “Could Turn Into The Endgame”
2.S&P Threatens Greece With Downgrade If Bond Spreads Are Not Quickly Reduced
3.PIMCO Compares Greece To Titanic, Says Bonds Not Attractive Even Over 7%
4.Is A Big US Bank Betting On A Greek Default In 11 Days?

Interesting Links:

Hispanics Create More than Half of Food Growth(Retailer Daily)
The U.S. Hispanic segment made up more than 50% of real U.S. food, beverage and restaurant growth between 2005 and 2008, generating $52 billion of new inflation-adjusted spending. In contrast, non-Hispanics generated $40 billion of new inflation adjusted spending during the same period. This means that between 2005 and 2008, Hispanics accounted for 57.7% of sales growth in the food, beverage and restaurant sector.

Southpark: Cartman as Jim Cramer of Facebook
A 1 minute clip which i found funny 🙂

Have a Good Night

-K

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