It is too early to tell yet, but today's unemployment report stinks. That leads to several questions:
1 - Is the report an outlier? We all know that the way our government reports its numbers stinks and is constantly adjusted. We will have to wait to see the adjustments to the numbers and then more reports.
2 - According to one Congressman, the labor force participation rate is worse than when the FED started the QE program. So the unemployment rate and numbers are a bogus measure of jobs.
3 - Is the economy therefore weakening?
4 - Is the "bad news is good news" scenario over? If so, the Fed may be boxed into a corner as their monetary policy may become one of "pushing on a string." Does the Fed have more tools up it's sleave? If not this could spell big time trouble.
5 - What is the Bond Market reaction to this? So far rates are down. how will this play out over time?
6 - How do Fed Chairmen leave at the exact right moment sticking their successors holding the bag? Greenspan stuck his mess on Bernanke. Is the economy petering out so that Bernanke is sticking his mess on Yellin? We shall have to wait and see. The market so far appears to be unsure but fading a bit.
In other news I sold GALT @$16.00 pre market and will probably sell MONIF on the gap up since it is trading up 6% in London. Whoosh anyone? I intend to trade this stock for a long time, but it is extended now and my fear of the market tips the balance for me.
BIG Capital Advisors and Seaview Partners are not responsible for your investment decisions. We believe very strongly in our opinions, but you must perform your own due diligence in making your investment decisions.
Friday, January 10, 2014
Thursday, January 09, 2014
Fasten Your Seatbelts
2014 has started out with a Margo Channing stock market. http://www.youtube.com/watch?v=Eg-ckMup6SI "Desolation Row" verse two for any Dylan fans out there
http://rock.rapgenius.com/Bob-dylan-desolation-row-lyrics#note-1356055:
Take The Gift And Sell The Gap Open
Today's market was a a microcosm of 2014 so far. There was a classic gap up open that was immediately faded until the market went negative. Then the market made some tentative bounces but ended up nowhere. The NASDAQ was the worst of the lot as the S&P 500 finished fairly flat.. As I have repeatedly stated, I do not trust this tape and have compensated by trading very fast, grabbing my profits when I can. To that end, I sold BIIB (up 5.5 point), YELP (up 2.25 points) and QIHU (down around 2.75 points) all on the gap up open. Then I waited for things to settle down - which it did except for crazy day trading special situations.
I must offer a mea culpa for QIHU as they denied that a rumored Alibaba investment was behind yesterday's rise. All my news scans did not show that rumor yesterday and I would have advised selling it until the rumor was confirmed.
As for other stocks, I laid low all day with two exceptions. I purchased some RDN which I mentioned yesterday. I intend to hold on unless this market really starts to sell off. It is almost at the breakout point.
http://rock.rapgenius.com/Bob-dylan-desolation-row-lyrics#note-1356055:
Take The Gift And Sell The Gap Open
Today's market was a a microcosm of 2014 so far. There was a classic gap up open that was immediately faded until the market went negative. Then the market made some tentative bounces but ended up nowhere. The NASDAQ was the worst of the lot as the S&P 500 finished fairly flat.. As I have repeatedly stated, I do not trust this tape and have compensated by trading very fast, grabbing my profits when I can. To that end, I sold BIIB (up 5.5 point), YELP (up 2.25 points) and QIHU (down around 2.75 points) all on the gap up open. Then I waited for things to settle down - which it did except for crazy day trading special situations.
As for other stocks, I laid low all day with two exceptions. I purchased some RDN which I mentioned yesterday. I intend to hold on unless this market really starts to sell off. It is almost at the breakout point.
I also traded GALT in and out 4 times and am holding it overnight. I do not recommend purchase of this momentum biotech stock. Biotech stocks were hot today led by GALT and ICPT which had news. My trades were all based upon using the day tic chart selling the rips waiting for a pull back and buying the next moves up. This was a world record for me because I have always had diminishing results in day trading one particular stock. Like flipping a coin, the odds of 4 successful day trades in a row are tempting the trading Gods. I will probably sell early tomorrow - maybe even pre market before the unemployment report.
Lastly, MONIF was up nicely today after MONIL was up big in London. I may sell if it reaches it's old spike up highs. I love the stock, but am fearful of this market. I can always buy it back.
In sum, this is strictly a fast trading market until the dust clears. I will trade breakouts, news driven special situations and hopefully find longer term investments as things go on. I will also go short if things really start to turn down. But I will not chase my tail day trading the indexes. One last note about updates. They are very hard to do in the heat of the battle. Sometimes I tweet during the day as I did today with many of my moves.
Wednesday, January 08, 2014
Closing Comments
This choppy market environment is good for trading special situations. However, one must be fast and get ready to sell sooner than later. I would rather trade in a trending market. Now some comments on today's trading:
One of my tweets went viral today. It was a funny picture called Fed Deflation that I got from a poster on my IV message board.
Here are a number of stocks I traded:
BIIB broke out within a base below the highs. Can it go all the way? Great company got rec'd today
BORN Cup with handle move? I can not confirm any financial info about this China stock. Some message board posters are saying that the company has net assets way above the share price. Will the ghost of Ben Graham confirm this? If not don't trust a message board poster. Strictly a hit and run small mo mo trade.
QIHU This company has a great track record of several years of 100% plus growth. The only problem is that some people are questioning the company's finances calling them a fraud. Subsequent to the allegations of fraud the company has taken several steps to regain investor credibility. It popped a ledge within the base today and conceivably could run to the old highs and more. We shall see if the base continues or if QIHU can go for the brass ring.
YELP Great grower broke out the past day or so.
Next some comments on Doug Kass posts:
RDN His recommendation looks great on the charts. After a huge run it has consolidated nicely and is close to breaking out of a base. Look at those tight Bollinger Bands.
As for Doug's compelling surprises for 2014, I'm having some trouble with his first prediction of slowing growth and stagflation. Here is my conundrum.
1 - I do not know if the economy will slow down or not in 2014. But if it does, that will put the Fed back into the position of "pushing on a string" in order to keep the economy alive.
2 - We all know that on a historic basis the amount of pumping that the Fed has done with QE, the monetary base, etc., is greater by several standard deviations than any time in history. Just look at a chart on the web and compare it to Milton Friedman and Anna Schwartz long term money supply chart in their seminal work "A Monetary History of The USA."
3 - Despite the enormous pumping, the economy is still growing at a sub par pace and unemployment is off the charts because of the abnormal amount of so called "discouraged workers." Our unemployment stats are absurd. We all learned about the discouraged worker affect years ago in college. But, the numbers have changed by historic proportions. The percent of discouraged workers is way beyond anything we have seen - At least in my lifetime. All things being equal, we are easily over 10% unemployment.
4 - Bernanke has made his case that 1937 USA type deflation or a 1989 Japan post bubble economy was his fear. Hence the enormous pumping to avoid deflation and get the economy going. Now that the economy is barely growing on its own, If the economy slows and the Fed keeps pumping, all things being equal, why would there be stagflation? There would be less demand.
5 - I understand that outrageous amounts of money lead to inflation during ordinary times. But if there is no demand pull inflation now with some growth, where is the demand pull inflation going to come from if there is no growth? How is the money going to get from the banks to the people who need it? I can see the money still going into stocks, if the Fed keeps pumping. also housing and any vehicle that big money can leverage into with low interest rates. But don't we need economic growth for inflation? There certainly is no wage push at this time.
BIG Capital Advisors and Seaview Partners are not responsible for your investment decisions. We believe very strongly in our opinions, but you must perform your own due diligence in making your investment decisions.
One of my tweets went viral today. It was a funny picture called Fed Deflation that I got from a poster on my IV message board.
Here are a number of stocks I traded:
BIIB broke out within a base below the highs. Can it go all the way? Great company got rec'd today
BORN Cup with handle move? I can not confirm any financial info about this China stock. Some message board posters are saying that the company has net assets way above the share price. Will the ghost of Ben Graham confirm this? If not don't trust a message board poster. Strictly a hit and run small mo mo trade.
QIHU This company has a great track record of several years of 100% plus growth. The only problem is that some people are questioning the company's finances calling them a fraud. Subsequent to the allegations of fraud the company has taken several steps to regain investor credibility. It popped a ledge within the base today and conceivably could run to the old highs and more. We shall see if the base continues or if QIHU can go for the brass ring.
YELP Great grower broke out the past day or so.
Next some comments on Doug Kass posts:
RDN His recommendation looks great on the charts. After a huge run it has consolidated nicely and is close to breaking out of a base. Look at those tight Bollinger Bands.
As for Doug's compelling surprises for 2014, I'm having some trouble with his first prediction of slowing growth and stagflation. Here is my conundrum.
1 - I do not know if the economy will slow down or not in 2014. But if it does, that will put the Fed back into the position of "pushing on a string" in order to keep the economy alive.
2 - We all know that on a historic basis the amount of pumping that the Fed has done with QE, the monetary base, etc., is greater by several standard deviations than any time in history. Just look at a chart on the web and compare it to Milton Friedman and Anna Schwartz long term money supply chart in their seminal work "A Monetary History of The USA."
3 - Despite the enormous pumping, the economy is still growing at a sub par pace and unemployment is off the charts because of the abnormal amount of so called "discouraged workers." Our unemployment stats are absurd. We all learned about the discouraged worker affect years ago in college. But, the numbers have changed by historic proportions. The percent of discouraged workers is way beyond anything we have seen - At least in my lifetime. All things being equal, we are easily over 10% unemployment.
4 - Bernanke has made his case that 1937 USA type deflation or a 1989 Japan post bubble economy was his fear. Hence the enormous pumping to avoid deflation and get the economy going. Now that the economy is barely growing on its own, If the economy slows and the Fed keeps pumping, all things being equal, why would there be stagflation? There would be less demand.
5 - I understand that outrageous amounts of money lead to inflation during ordinary times. But if there is no demand pull inflation now with some growth, where is the demand pull inflation going to come from if there is no growth? How is the money going to get from the banks to the people who need it? I can see the money still going into stocks, if the Fed keeps pumping. also housing and any vehicle that big money can leverage into with low interest rates. But don't we need economic growth for inflation? There certainly is no wage push at this time.
BIG Capital Advisors and Seaview Partners are not responsible for your investment decisions. We believe very strongly in our opinions, but you must perform your own due diligence in making your investment decisions.
Follow Up On Today's Trading
Another strange day. Selected special situation stocks run. The NASDAQ 100 has no correlation with the Dow Jones Industrials.
I sold the POT I bought this morning at $33.90. It had a failed breakout and after running up huge on another bullish tout on CNBC. Then failed to hold $33.87 resistance level. If it closes above today's high I may buy back.
I am holding BIIB and YELP. Cramer bulled YELP big time. I use Cramer as a tool. I look at the story and the chart and then may possibly buy if timing and story fit my criteria. Like anything else, if just one idea of his fits my due diligence, it is worth it.
I'm glad I sold MU into the gap up. Lets see if it can hold the breakout or at least close strong. I want to buy it back, but not yet. Patience.
SLG.TO (SGURF US ADR) Has a great fundamental story. Low priced stock has great upside. The US stock is thin, but trades as a proxy for the Toronto stock which trades in volume..
BIG Capital Advisors and Seaview Partners are not responsible for your investment decisions. We believe very strongly in our opinions, but you must perform your own due diligence in making your investment decisions.
I sold the POT I bought this morning at $33.90. It had a failed breakout and after running up huge on another bullish tout on CNBC. Then failed to hold $33.87 resistance level. If it closes above today's high I may buy back.
I am holding BIIB and YELP. Cramer bulled YELP big time. I use Cramer as a tool. I look at the story and the chart and then may possibly buy if timing and story fit my criteria. Like anything else, if just one idea of his fits my due diligence, it is worth it.
I'm glad I sold MU into the gap up. Lets see if it can hold the breakout or at least close strong. I want to buy it back, but not yet. Patience.
SLG.TO (SGURF US ADR) Has a great fundamental story. Low priced stock has great upside. The US stock is thin, but trades as a proxy for the Toronto stock which trades in volume..
BIG Capital Advisors and Seaview Partners are not responsible for your investment decisions. We believe very strongly in our opinions, but you must perform your own due diligence in making your investment decisions.
No Memory of Yesterday's Rally, But Selected Strength
Here are some charts of stocks that are in great set ups or have broken out in today's mixed bag market
BIIB Trying to pop on buy rec
MU Nice breakout, but may have to digest gap open
POT Najarian mentioned huge call buying. Trying to breakout
TASR Trying to pop on good company news
VIPS Trying to breakout
YELP Clean breakout
BIG Capital Advisors and Seaview Partners are not responsible for your investment decisions. We believe very strongly in our opinions, but you must perform your own due diligence in making your investment decisions.
BIIB Trying to pop on buy rec
MU Nice breakout, but may have to digest gap open
POT Najarian mentioned huge call buying. Trying to breakout
TASR Trying to pop on good company news
VIPS Trying to breakout
YELP Clean breakout
BIG Capital Advisors and Seaview Partners are not responsible for your investment decisions. We believe very strongly in our opinions, but you must perform your own due diligence in making your investment decisions.
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