Tropical Storm Alex to BP’s Rescue
I Want my life back! I am not the only one as plenty of fishes, birds, and people also want their life back that BP plc (ADR) has taken away. Not to Worry because BP feels sorry, so sorry that it is donating oil spill revenue to charity (the National Fish and Wildlife Foundation). BP said it would provide $5 million to the group immediately, Based on a current futures price of $77.83 a barrel, the collected oil is worth about $1.2 million. BP hopes to cap the well by August.
With the CEO now out of the picture time to get back to work and stop this drilling insanity. Hmm maybe not thanks to a federal judge who has overturned the Obama administration’s 6-month moratorium on new deepwater offshore drilling projects. What's the reason for overturning the decision?
The Interior Department said it needed time to study the risks of deepwater drilling but U.S. District Judge Martin Feldman said in his ruling the Interior Department assumed that because one rig failed, all companies and rigs doing deepwater drilling pose an imminent danger.
Come on there has to be more to this story and thankfully there is. Like many judges presiding in the Gulf region, Feldman owns lots of energy stocks, including Transocean, Halliburton, and two of BP’s largest U.S. private shareholders — BlackRock (7.1%) and JP Morgan Chase (28.3%). Here’s a list of Feldman’s income in 2008. How can he stop drilling when his heart is fully soaked in oil? He can't because Industry ties among federal judges are so widespread that they are beginning to endanger the courts’ ability to conduct routine business.
More great news! We don't need to head to Italy to see the amazing Leaning Tower of Pisa because BP pipe is tilting more.
The Deepwater Horizon riser package that sits on the seabed a mile below the ocean surface weighs over 450 tons, including the 48-foot-tall failed blowout preventer. National Incident Commander Thad Allen announced that the riser package is tilting “10 or 12 degrees off perpendicular (On June 10 it was only tilting by about 2 or 3 degrees). Engineers and geologists fear the stack atop the well could tip over if the well integrity further degrades, leading to the “unlikely, but not implausible” scenario of “oil gushing through the sea floor.”
Hey you say, its unlikely and worst case scenario and BP will get things rolling before something worse happens. What else coulg go wrong? everything is already factored for the worse.
Oh wait! More Great news just arrived! Tropical Storm Alex comes to the rescue (or not) of BP. The ECMWF model is the most aggressive in developing this system, taking it into the Gulf of Mexico as a hurricane next week. The NOGAPS model keeps the storm weak and farther south, predicting that 93L will bring heavy rains to northern Honduras as a tropical disturbance or tropical depression on Friday and Saturday. But either way this will be fun to watch.
Here is the graph of Invest93 (Tropical Storm Alex)
Check out some previous BP Posts:
BP Cares about the small people June 17
BP now stands for Bad Publicity June 14
Thats all Folks,
-K
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
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
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
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
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
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
Current Picks Updated 4-4-2010
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.
IWM upgraded to BUY on Apr 01 at $68.43 (SELL Mar 19 at $67.41)
DRYS upgraded to BUY on Mar 29th at $5.88 (SELL Mar 25 at $5.66)
SRS upgraded to BUY on Mar 31st at $6.04 (SELL Feb 16 at $7.83)
REW upgraded to BUY on Apr 1st at $21.06 (SELL Feb 26 at $23.86)
DIG upgraded to BUY on Mar 30th at $34.27 (SELL Mar 19 at $33.97)
URE downgraded to SELL on Mar 31st at $8.14 (BUY Feb 16 at $6.38)
JNK downgraded to SELL on Apr 1st at $39.51 (BUY Feb 17 at $37.97)
HYG downgraded to SELL on Mar 31st at $87.50 (BUY Feb 17 at $85.38)
DUG downgraded to SELL on Mar 30th at $12.36 (BUY Mar 19 at $12.40)
SMN downgraded to SELL on Mar 29th at $6.99 (BUY Mar 19 at $7.37)
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
Nightly Recap 3-30-2010
Market Summary:
DOW +11.56 (10,907.42)
S&P -0.05 (1,173.27)
Nasdaq +6.33 (2,410.69)
____________
Disclaimer:
Open Positions: SRS at 5.97
___________
Nightly News Links
US Economy:
Downtown New York Office Vacancy Rate Spikes To 9/11 Levels (Zero Hedge)
Bloomberg TV reports that the office vacancy rate in downtown NY has dropped to September 11th levels, and is about to pass 14%.
SPX Struggling at 1180 (The Art Of Trading)
"The SPX has attempted several times to crack thru 1180 and seems to be having trouble. I think it's best to sit in cash or be very nimble if you wanna play the short side. 1150 is very strong support for the SPX and pullbacks there would likely see some solid bounce i imagine. If i had it my way, i'd love to see the indexes pullback for another few more days. As i type this, i am noticing lots of stocks turning deeper into the red yet the indexes are only down slightly. I think CASH IS KING and look to buy stocks on dips!"
Interesting Links:
22 Storms in NE: Winter 2009-2010 Radar Loop (AccuWeather)
Today what could be the last Nor'easter of the season is affecting the Northeastern U.S. It's interesting if you compare the heavy rain area for today's storm with the heavy snow area from this winter, they are very similar. Major storms are continuing to move up the East Coast as they have all season, it's just warmer now so we're seeing rain instead of snow.* These winter storms have dropped 30-40 inches of rain (and liquid snow) in the I-95 corridor, which would normally only receive 20-25 inches over the winter.
That is all for tonight, very boring night link-wise, weather wise and market wise.
Have a Good Night and here's to a more exciting Wednesday.
-K