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
State Street Corp. Options Fun
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
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
The Investingfreak Special SPX chart re-visited
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
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 AMD, FCS 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
Are Greek stocks ready for a comeback?
With all the recent bailout talks for Greece it might seem like a good time to short Greek assets right? No!
The risk rewards at this point have been cut in half. I will display a chart below of the Dow Jones Greece Stock Index $GRDOW.
Here is a 3 year chart with no comments. (Click to Enlarge)
Here is the 1.5Year chart showing a different story.
You see... Greece did hit bottom at the same time as the entire market did as well back in March of 2009 BUT Greece topped out in October of 2009 and started its next leg down.
From March-October 2009 the index rose from 124.17 to 267.40!
Thats 143.23 point gain or 115% Gain in 8 months... and here we are complaining that our market has gone up 75% and is overdue for a correction.
Now as we can see from the chart below Greece then took a turn from 267.40 to 150.84 in February of 2010 (and it might be making a lower low coming up if the bailout saga isn't fully discounted yet) the 116.56 point drop from the October 2009 peak to the temporary February 2010 bottom is a 43.5% correction!
Back to my original question... now do you see why I said no to shorting the Greeks? 44% Correction has already occurred and even if there is another 150 points to the downside (another 50% or so) the risk reward is no longer there. I might be looking to buy up some Greek Gyros or Banks soon to play. One such play is National Bank of Greece (NBG)
Here is the chart for NBG to compare to the entire index. Also Notice the Recent Volume (Click to Enlarge)
Thats all for tonight folks. Have a good night and a good trading day tomorrow.
-K
A Special S&P 500 Chart courtesy of Investingfreak
This weekend I will share with you a chart that I view at the end of every week.
When I glanced at it last night i saw that we are right at the bottom of a trending channel.
It will be an interesting week coming up so I decided to finally share it with the rest of the world (including the masterminds at Gold in Sachs)
As always click the above image to enlarge. Since a picture is worth more than a thousand words there is no need for me to comment on it further.
Have a profitable week ahead.
-K
Nightly Recap 3-25-2010
Market Summary:
DOW +5.06 (10,841.21)
S&P -1.99 (1,165.73)
Nasdaq -1.35 (2,397.41)
Nightly News Links
US Economy:
The Social Security Tipping Point (Econompic)
The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.
This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office. The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.
The Recession Ans Recovery In Perspective (Minneapolis Fed)
The 2007-2009 recession is widely thought to have ended sometime last summer. How bad was this recession, and how quickly is the economy recovering? How does this recession and recovery compare to previous cycles? Check the Link for interactive Charts.
Ambac to File Bankruptcy ( The Big Picture)
Bond insurer Ambac Financial Group said again that it may seek bankruptcy protection after state regulators took control of some of its most troubled assets.
The news Thursday sent the company’s already devalued stock into a tailspin.
World Economy:
Dell Leaving China In Search Of "Safer Environments" In India (TFTS)
India’s Prime Minister, Manmohan Singh, told the Indian press that Dell chairman Michael Dell assured him that Dell was moving $25 billion in factories from China to India. Original motives were cited for environmental concerns. But later details come up as to dell wanting a ’safer environment conductive to enterprise.’”
China Official: "Will not adjust exchange rate" (Calculated Risk)
After meeting with officials at the Treasury and Commerce Departments on Wednesday, China’s deputy commerce minister, Zhong Shan, told reporters, “The Chinese government will not succumb to foreign pressures to adjust our exchange rate."
“It is wrong for the United States to jump to the conclusion that China is manipulating currency from the sheer fact that China is enjoying a trade surplus,” Mr. Zhong told reporters in a meeting at the Chinese Embassy. “Besides, it’s wrong for the United States to press for the appreciation of the renminbi and threaten to impose punitive tariffs on Chinese experts. This is unacceptable to China.”
This is more posturing before the Treasury releases the worldwide currencies report on April 15th that might name China a "currency manipulator".
All Hell To Break Loose: April 15th (Reuters)
U.S. senators have introduced new legislation that threatens China with punitive duties if it fails to lift the value of its currency, boosting pressure on the Obama administration to take action under existing law.
The bipartisan measure, which merges earlier efforts to change the currency law, aims to end what the lawmakers said was Beijing's deliberate efforts to keep the yuan cheap to subsidize exports and tax imports.
Have a Good Night
-K
Nightly Recap 3-22-2010
Market Summary:
DOW +43.91 (10,785.89)
S&P +5.91 (1,165.81)
Nasdaq +20.99 (2,395.40)
Nightly News Links
US Economy:
Chicago Fed National Activity Declines in February (Econompic)
The 85 economic indicators that comprise the Chicago Fed's index are drawn from four categories: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories. The three month average fell to -0.64 in February from -0.04 in January.
Tomorrow, Tim Geithner Urges End to Fannie and Freddie ‘Ambiguity’ (Bloomberg)
Tim Geithner is set to deliver unwelcome to news to those who play in the public Fannie Mae (FNM) and Freddie Mac (FRE) casino. Private gains can no longer be supported by the umbrella of public protection, capital standards must be higher and excessive risk-taking must be appropriately restrained,” Geithner said in testimony prepared for the House Financial Services Committee that was obtained today by Bloomberg News. The hearing is scheduled for tomorrow at 10 a.m. in Washington.
The Pressure on Malls: More Store Closings (Calculated Risk)
"Our outlook for retail properties as a whole is bleak ... we do not foresee a recovery in the retail sector until late 2012 at the earliest." Over the next three fiscal years, 25 percent of our store leases will reach maturity ... E-commerce is 30 percent of our corporate revenue and it’s very profitable ... even in this environment. The Internet and e-commerce have become the focus on our capital investment."
World Economy:
Global Productivity and Unemployment (Econompic)
Producing more by working less is the key to rising living standards, but in the short term there is a tension between efficiency and jobs. America and Europe have managed this trade-off rather differently. America has gone on a diet: it has squeezed extra output from a smaller workforce and suffered a big rise in unemployment as a consequence. Europe, meanwhile, is hoping to burn off the calories in the future. It has opted to contain job losses at the cost of lower productivity.
The Beginning of the End of the Eurozone As We Know It? (Naked Capitalism)
The widely-extolled idea, that the EU would find a way to muddle through the Greece crisis, looks very much in doubt. The pressure has not simply put the rescue of Greece into disarray, but appears to have led to some positions being taken that, if they hold, look likely to lead to the partial dissolution of the monetary union. This development would have far-reaching ramifications which are far from well understood, to put it mildly.
Interesting Reads:
Dear Evil Speculators (The Reformed Broker)
Dear Evil Speculators,As part of our ongoing program designed to render the US stock market completely dysfunctional, we have added an additional tax to be applied toward your investment income as part of the wildly popular Health Care Bill that we recently finagled through into law: * Individuals earning more than $200,000 a year, or couples earning $250,000 or more, would be hit with a 3.8% surcharge on investment income to help pay for the bill.You see, we are fully aware that in just the past decade, you have been slammed twice - 2000-2002 and 2007-2009 - with two of the most brutal bear markets in history - but we just don't care.
Health Care Expenses vs. Life Expectancy (The Big Picture)
A very insightful chart comparing Countries using Life expectancy and Health care spending.
Hedge Fund Ebullio Capital: Down 86.25% In One Month (Market Folly)
By now, many of you may have already heard the startling tale of Lars Steffensen's hedge fund Ebullio Capital Management. For the month of February 2010, they were down a whopping 86.25%. That brought their year to date total return to -95.83%. Immediately, questions swirl in one's head such as 'How did this happen? What kind of risk management did they have in place? How will they recover?' Remarkably, their investor letter had quite a calm tone to it.
Have a Good Night
-K
Nightly Recap 3-15-2010
Market Summary:
DOW +17.46 (10,642.15)
S&P +0.52 (1,150.51)
Nasdaq -5.45 (2,362.21)
Nightly News Links
US Economy:
NY Manufacturing Index Shows Strength (Econompic)
Manufacturing activity in the New York region continued at a solid pace in March, the New York Federal Reserve Bank said Monday. The new orders index shot up 17 points to 25.4. Shipments also moved higher. Inventories climbed above zero for the first time since August 2008.
ECRI Leading Economic Index Drops For 12th Week In A Row (ZeroHedge)
Leading indicators in the U.S. are telling a similar story about a possible double-dip. Friday’s reading from the ECRI continues to show a weakening recovery. Their leading indicator’s growth rate fell to a 31 week low. The smoothed ECRI leading economic index for the U.S. fell last week for the 12th week in a row, to stand at its lowest level since July 2009. Something tells us a slowdown is about to start.
World Economy:
Moody's warns nations to cut spending or risk AAA ratings (Washington Post)
The United States and other top world economies need to make potentially painful government spending cuts or risk losing the high-grade credit ratings that have kept borrowing affordable, the Moody's rating agency said Monday. Outlining the dilemma faced by policymakers in the United States, Great Britain, Germany and France, Moody's said that debt levels in the four large credit-worthy economies had reached the point at which they are at risk of being downgraded -- a step that would drive up interest rates, increase borrowing costs and mark a turn in perceptions about the world economy.
Germany's Manufacturing Jobs Fell 4.9% in January (Business Insider)
The Federal Statistical Office said Monday the number of Germans employed in manufacturing fell to 4.9 million workers from about 5.15 million in January 2009.
Chinese Economic Indicators Are Starting To Roll Over (Pragmatic Capitalist)
“Early signs of softening in data momentum suggests we should be much more cautious about corrections in those markets that benefited late last, and early this year.” Despite being the strongest leg of the economic recovery, Chinese investors have turned remarkably cautious in recent months. The Shanghai Index peaked in July of 2009 and has traded down ever since. The index has declined 9.5% this year while U.S. investors have continued to run head first into stocks.
Interesting Reads:
Consumers Don’t Strongly Identify with Brands (Marketing Charts)
trendwatching.com calls these products and services “functionall,” or providing function for all. Often designed for lower-income consumers in emerging markets, they also have broader crossover appeal for more affluent consumers in mature markets. Look for brand manufacturers to produce more of these products, and for more global brands to try to penetrate mature economies.
Is The US Preparing For a Strike on Iran? (HeraldScotland)
Hundreds of powerful US “bunker-buster” bombs are being shipped from California to the British island of Diego Garcia in the Indian Ocean in preparation for a possible attack on Iran.The Sunday Herald can reveal that the US government signed a contract in January to transport 10 ammunition containers to the island. According to a cargo manifest from the US navy, this included 387 “Blu” bombs used for blasting hardened or underground structures.
National credit card statement (Cracked)
A National Debt happens when governments spend more than they actually have, and everyone getting the money agrees that's absolutely fine.
60 Minutes: Michael Lewis' The Big Short - Video (CBSNews)
If you had to pick someone to write the autopsy report on the Wall Street financial collapse 18 months ago, you couldn't do any better than Michael Lewis. He is one of the country's preeminent non-fiction writers with a knack for turning complicated, mind numbing material into fascinating yarns.
Part 1
Part 2
Have a Good Night
-K