Wednesday, July 25, 2007
Blackstone - Certainly has lived up to the STONE part of the name!
Blackstone is very close to offering us a great value, so keep it on your radar!
Sunday, July 22, 2007
Simply More Proof
Here is yet another piece of the puzzle, that clearly shows how weak the current state of the market is.
As you can see, price continues to move higher, but the participation of stocks continues to erode.
With the markets holding up as well as they have in the face of such divergences, it is very possible that we might experience a mini crash that will scare the hell out of people and get them
to all throw in the towel. From this point the real upside of the market will begin.
As you can see, price continues to move higher, but the participation of stocks continues to erode.
With the markets holding up as well as they have in the face of such divergences, it is very possible that we might experience a mini crash that will scare the hell out of people and get them
to all throw in the towel. From this point the real upside of the market will begin.
AGL Test and Lesson Time
Take a look at this weekly chart of AGL and tell me if it would be prudent to purchase the stock now, or wait for it to settle back and test the lows.
The answer is in the past.
I will post the answer this week.
Also look below at the daily chart of AGL.
The answer is in the past.
I will post the answer this week.
Also look below at the daily chart of AGL.
If you recall when we were looking at AGL as an educational tool that demonstrated a consolidation zone. The stock broke out of the zone in the opposite direction, but you can plainly see that it is a very useful tool and something you should always watch for.
Notice also, that once the stock broke below the bottom of the consolidation zone, it came back to test that level once more and failed. From there the true decline began.
The Only Inflation Gague is The Growth In The Monetary Base
If you follow this headline alone, it will put you ahead of 99% of the PH.D holding economists.
While they are busy making their complicated Econometric Models to predict inflation, we can do a very simple calculation and be done with it. On top of the simplicity is the accuracy.
So, simply take the Current Monetary Base, found in the St. Louis Fed Data and then this same data from a year ago. The percent change in the data is the inflation rate and best of all is a leading indicator.
There! Now you are armed with what amounts to a full semester of graduate classes, except this little diddy is actually useful.
While they are busy making their complicated Econometric Models to predict inflation, we can do a very simple calculation and be done with it. On top of the simplicity is the accuracy.
So, simply take the Current Monetary Base, found in the St. Louis Fed Data and then this same data from a year ago. The percent change in the data is the inflation rate and best of all is a leading indicator.
There! Now you are armed with what amounts to a full semester of graduate classes, except this little diddy is actually useful.
Secular Highs Being Put In Place?
Monthly chart of the British Pound is starting to look very much like 99% of this strong
move is over.
Sentiment about the U.S. Dollar would confirm this thought.
Ask yourself what it is that I see on the chart that would indicate this secular move is over.
move is over.
Sentiment about the U.S. Dollar would confirm this thought.
Ask yourself what it is that I see on the chart that would indicate this secular move is over.
Saturday, July 21, 2007
Keep The Stop Close
Corn is at the crossroads here.
The second leg down has not equaled the first leg down in price, so there is room for a bear market rally here. However, the lows were taken out and this would call for lower prices yet still.
The best plan of action is a tight trailing stop that will lock in our profits on corn should the market begin to rally.
One thing remains clear and that is the fact that the ultimate bear market low for corn has a long way to go before it gets here.
The second leg down has not equaled the first leg down in price, so there is room for a bear market rally here. However, the lows were taken out and this would call for lower prices yet still.
The best plan of action is a tight trailing stop that will lock in our profits on corn should the market begin to rally.
One thing remains clear and that is the fact that the ultimate bear market low for corn has a long way to go before it gets here.
After The Correction Look To Corus
They say a picture is worth a thousand words.
In the case of Corus (cors) it will be many multitudes of a thousand.
Keep an eye on this one as it will offer a chance of a lifetime in the very near future.
In the case of Corus (cors) it will be many multitudes of a thousand.
Keep an eye on this one as it will offer a chance of a lifetime in the very near future.
Friday, July 20, 2007
If You Talk About It Long Enough You Are Bound To Be Right : )
For those of you who have rode this great bull market in oil and oil related stocks I say
great job on massive profits!
What I also say however is that all good things come to an end and with the vast majority of investors extreme bullishness on oil stocks it is starting to look like 1980-1981 all over again.
In case you are to young, take a look back at the late 70's and early 80's and you will see a very eerie resemblance to now.
great job on massive profits!
What I also say however is that all good things come to an end and with the vast majority of investors extreme bullishness on oil stocks it is starting to look like 1980-1981 all over again.
In case you are to young, take a look back at the late 70's and early 80's and you will see a very eerie resemblance to now.
Thursday, July 19, 2007
Nanotech
While Nanotechnology is an excellent long term investment, the sector currently looks rather weak on an intermediate term basis.
Use any weakness to add to existing positions.
Use any weakness to add to existing positions.
How Many Chances Do You Want
If you have yet to begin your purchase of White Mountain, then now is an excellent time.
The stock has pulled back and looks to push higher, perhaps sharply so!
Remember this is an Ultra Long Term position and the Next Berkshire Hathaway, You simply have no excuse on this one.
The stock has pulled back and looks to push higher, perhaps sharply so!
Remember this is an Ultra Long Term position and the Next Berkshire Hathaway, You simply have no excuse on this one.
Simply Way Over Done
While it may prove to be just a bit early to purchase AHM, I simply cannot resist the bargain prices it has reached.
I plan on purchasing my line over time just in case all the downside has yet to terminate.
This would be considered very Aggressive
I plan on purchasing my line over time just in case all the downside has yet to terminate.
This would be considered very Aggressive
Long Term Perspective On Interest Rates
The Secular Monthly chart of the 10 year note is clearly stating that the next major move in the price of the notes will be up.
This thus translates into lower interest rates.
This thus translates into lower interest rates.
The Continued Demise of Crude Oil
I realize that we continue to get battered with all the $100 oil opinions, but I continue to stick
with my assessment that the petro complex is in the process of a long term top and the next major move will be DOWN!!
Take a look at the C.O.T. Data:
Big Money is Selling, Selling, Selling
Fund Money are Huge Buyers
Small Traders are Huge Buyers
This all adds up to lower crude oil prices.
with my assessment that the petro complex is in the process of a long term top and the next major move will be DOWN!!
Take a look at the C.O.T. Data:
Big Money is Selling, Selling, Selling
Fund Money are Huge Buyers
Small Traders are Huge Buyers
This all adds up to lower crude oil prices.
Sunday, July 15, 2007
TNH - Thank You!
It was an incredible ride, much higher than I thought it could go in such a short time.
The party however is temporarily over and now I look for a pull back into the low 70's before
I get back in.
The great part is that once this pullback has completed, the rally that will ensue will be even more powerful then what just occurred, so keep a close eye on this one.
The party however is temporarily over and now I look for a pull back into the low 70's before
I get back in.
The great part is that once this pullback has completed, the rally that will ensue will be even more powerful then what just occurred, so keep a close eye on this one.
Get Ready For the Unexpected!! - American Cars Back In Vogue
The Auto Sector is the next to bloom.
The purchases by private equity of Chrysler and Tower Automotive could not have been better timed. They were purchased at fire sale prices and if I could have gotten in on any of them I would have!!
Ford offers some great potential!!
The purchases by private equity of Chrysler and Tower Automotive could not have been better timed. They were purchased at fire sale prices and if I could have gotten in on any of them I would have!!
Ford offers some great potential!!
Pfizer - MRK all over again!!
While Pfizer may appear to most to be in a world of trouble, it is not how it should be viewed.
PFE offers exceptional value at these prices and as I have said before, it is in much the same
position that MRK was before it promptly doubled!!
Not to mention the stock offers a 41/2 % dividend yield.
If PFE decides to dip back into the $22-$23 area, please feel free to buy everything you can get your hands on. Your Children will thank you.
PFE offers exceptional value at these prices and as I have said before, it is in much the same
position that MRK was before it promptly doubled!!
Not to mention the stock offers a 41/2 % dividend yield.
If PFE decides to dip back into the $22-$23 area, please feel free to buy everything you can get your hands on. Your Children will thank you.
MRK - A Lesson To Apply To PFE NOW!!
I have spoken about MRK in the past and especially the bargain prices we were given in the upper 20's.
The stock has more to go on the upside, perhaps the $70-$80 range, however it needs a pullback here of 10% or so so don't be alarmed when it comes.
The stock has more to go on the upside, perhaps the $70-$80 range, however it needs a pullback here of 10% or so so don't be alarmed when it comes.
IndyMac - Accept the GIFT
If you have not been purchasing IndyMac over the last 4 months, then you have been given yet another gift!!
You will look back 18 months from now and be very sorry you did not pick up this powerhouse
company that has NO SUB-PRIME Mortgages!!!
Did I Happen To Mention That IMB Has 54% of Its Stock Sold Short!!!
What will happen when all these short positions have to buy back in??
Can you say EXPLOSION!!!
You will look back 18 months from now and be very sorry you did not pick up this powerhouse
company that has NO SUB-PRIME Mortgages!!!
Did I Happen To Mention That IMB Has 54% of Its Stock Sold Short!!!
What will happen when all these short positions have to buy back in??
Can you say EXPLOSION!!!
Equities Continue to Deteriorate
Just a very quick note on the Equity Markets as a Whole.
Friday was yet another day of distribution by the smart money, so please do not get fooled by
the price action of some indexes.
It is important to note however that the bulk of the distribution by the big money has been
in a hedge type fashion. Which really helps to confirm our outlook for a sharp correction of 8%-15% followed by a hell of a rally.
I am not a bear by any means. I just recognize a market that is very tired and needs some
fear put into the players before it can continue the secular bull market!!
Friday was yet another day of distribution by the smart money, so please do not get fooled by
the price action of some indexes.
It is important to note however that the bulk of the distribution by the big money has been
in a hedge type fashion. Which really helps to confirm our outlook for a sharp correction of 8%-15% followed by a hell of a rally.
I am not a bear by any means. I just recognize a market that is very tired and needs some
fear put into the players before it can continue the secular bull market!!
Thursday, July 12, 2007
BUY Revlon For A Potential Killer Move!!
Revlon is a BUY in the $1.19 - $1.25 area, with a very close stop at $1.15 on a close only.
GMTN
Gander Mountain has once again come through in a pinch for us.
I continue to look for the stock to challenge $22 over the next 12 months.
However on a short term basis is you want to tale the 10% plus profit and buy back later after the market corrects, there is nothing wrong with that either.
I do stress however that this is for short term traders and those who are in it for the long term should continue to hold the position.
I continue to look for the stock to challenge $22 over the next 12 months.
However on a short term basis is you want to tale the 10% plus profit and buy back later after the market corrects, there is nothing wrong with that either.
I do stress however that this is for short term traders and those who are in it for the long term should continue to hold the position.
Sugar - Get Ready to Ride
Sugar appears to have finally put in a low of some substance.
The current wedge that is forming on the daily chart indicates that it wants
to move lower on an intermediate term basis.
We will be buyers on the weakness in the 8.90 to 9.20 area!
The current wedge that is forming on the daily chart indicates that it wants
to move lower on an intermediate term basis.
We will be buyers on the weakness in the 8.90 to 9.20 area!
Corn has Rewarded Us Well
The question remains.... Is the Decline in Corn Over?.... The Answer is NO!!
However, it is very close to the point of covering our shorts. We have some massive profits and another 8-10 cent rally and we will be forced to cover, so keep your stops tight.
However, it is very close to the point of covering our shorts. We have some massive profits and another 8-10 cent rally and we will be forced to cover, so keep your stops tight.
The True Measure Of Inflation - A Little Know Secret
Keep this information in your battle chest as there are very few who know what I am about to share with you.
INFLATION IS ONLY MEASURED AND PREDICTED BY THE MONETARY BASE.
Don't waste your time with Core PPI or Core CPI or PPI Ex this and that and the other.
It is useless!!
The true measure of pricing pressures is the change and growth in the monetary base.
This is an all encompassing piece of data and covers everything you could possibly need to know
about the liquidity of the economy.
So it is as simple as this. Compare the Monetary Base of the Last 2 Weeks to the most recent 2 Weeks and multiply by 26. This is one stat. Now here is the most reliable and the toughest.
Take the current Monetary Base and compare it to the Monetary Base from a year ago and Viola, you have the inflation rate. You will be the envy of economists and wall street when you see how accurate you are with these numbers, but keep the secret to yourself.
By the Way, the current reading of the monetary base is a very tame 1.73% yearly inflation rate, so all the doomsday advocates who think the inflation rate is going to spiral out of control are way off the mark and you are smart enough to know it!! So use it to your advantage and know that once this market corrects on an intermediate term basis and the sky is falling crowd is out in force, then it will be time to purchase quality equities and quality leaps.
INFLATION IS ONLY MEASURED AND PREDICTED BY THE MONETARY BASE.
Don't waste your time with Core PPI or Core CPI or PPI Ex this and that and the other.
It is useless!!
The true measure of pricing pressures is the change and growth in the monetary base.
This is an all encompassing piece of data and covers everything you could possibly need to know
about the liquidity of the economy.
So it is as simple as this. Compare the Monetary Base of the Last 2 Weeks to the most recent 2 Weeks and multiply by 26. This is one stat. Now here is the most reliable and the toughest.
Take the current Monetary Base and compare it to the Monetary Base from a year ago and Viola, you have the inflation rate. You will be the envy of economists and wall street when you see how accurate you are with these numbers, but keep the secret to yourself.
By the Way, the current reading of the monetary base is a very tame 1.73% yearly inflation rate, so all the doomsday advocates who think the inflation rate is going to spiral out of control are way off the mark and you are smart enough to know it!! So use it to your advantage and know that once this market corrects on an intermediate term basis and the sky is falling crowd is out in force, then it will be time to purchase quality equities and quality leaps.
Caution Continues to Be The Word
The Moving Average on the Three Line Break sentiment chart has clearly rolled over and we all know what follows such an event.
As hard as it may seem right now, you must resist the temptation to increase your equity exposure. If anything a reduction in equities is the most prudent course.
As hard as it may seem right now, you must resist the temptation to increase your equity exposure. If anything a reduction in equities is the most prudent course.
Weaker and Weaker Equities Become
There is much fanfare about the huge rally today, as the markets posted their biggest one day rally in over 4 years.
Now had this come after a prolonged contraction in prices then I would be very excited about the prospects. The fact remains however that equities are in a very dangerous position on the intermediate term and the longer it takes to move lower and get rid of the many intermediate term excesses then the more painful the decline will become.
The chart below shows yet another negative divergence in the equity markets with the S&P 500 moving to a new high, but the cumulative Advance to Declines does not confirm.
The most telling momentum picture that shows the weakness of this market is the Summation Index, which has been making lower highs for better than a year now as the market continues higher. The reason I say this is the most telling sign is the fact that this anomaly is ALWAYS rectified and this time is no different.
Keep your hedge in place and do not get sucked into this blow off rally, it will only bring your portfolio pain in the near future.
Now had this come after a prolonged contraction in prices then I would be very excited about the prospects. The fact remains however that equities are in a very dangerous position on the intermediate term and the longer it takes to move lower and get rid of the many intermediate term excesses then the more painful the decline will become.
The chart below shows yet another negative divergence in the equity markets with the S&P 500 moving to a new high, but the cumulative Advance to Declines does not confirm.
The most telling momentum picture that shows the weakness of this market is the Summation Index, which has been making lower highs for better than a year now as the market continues higher. The reason I say this is the most telling sign is the fact that this anomaly is ALWAYS rectified and this time is no different.
Keep your hedge in place and do not get sucked into this blow off rally, it will only bring your portfolio pain in the near future.
Tuesday, June 26, 2007
Fording Coal
While the long term trend on Fording remains bullish, it does appear to be in need of a correction, with 25 1/2 - 27 being the most logical targets.
Correlation
The correlation of the 10 Year T Note to the Price of Transportation stocks is uncanny.
Take a look at this chart and you will see why it pays the heed its warning!
Take a look at this chart and you will see why it pays the heed its warning!
Gander Mountain is Ready To Run!!
Gander Mountain looks about ready to launch its final assault upwards to the $22-$24 price range. Keep a close stop just below the most recent lows and only on a closing basis.
Wild Swings Tell A Story
The most recent price action over the last 10 days or so says much about the current state of affairs in the equity markets.
It is indicative of these markets to have wild swings in a trend change process and that is exactly what is taking place now.
I remain 100% hedged against a decline and it certainly is not to late to establish a hedge as there remains a possibility of a 15% decline.
It is indicative of these markets to have wild swings in a trend change process and that is exactly what is taking place now.
I remain 100% hedged against a decline and it certainly is not to late to establish a hedge as there remains a possibility of a 15% decline.
Commodity Based Stocks
I had posted before about the commodity based stocks, especially the steels and how they are very prone to a sharp decline.
I thought it only fitting to repeat the warning as even though they have declined some, they still have a long ways to go.
I thought it only fitting to repeat the warning as even though they have declined some, they still have a long ways to go.
Sunday, June 24, 2007
Sugar - Finally an Early Bull Market Taking Form
Patience at most times is our greatest weapon.
Sugar has been no exception!
Potential Huge Rally in the Offing so begin to establish a line on any price weakness!
Sugar has been no exception!
Potential Huge Rally in the Offing so begin to establish a line on any price weakness!
Intermediate Term Weakness/Long Term Undervalued
Although on an Intermediate Term basis, equities have begun a state of consolidation and decline (perhaps 10%), the weekly chart below shows why long term investors need to remain Ultra Bullish.
Notice that even though most equity indexes are very near their all time highs, the commercial traders (blue line) remain heavy heavy purchasers of stocks.
So when this correction has run its course, all I can say is LOAD UP on quality equities and if you are aggressive, put together a LEAPS portfolio.
Notice that even though most equity indexes are very near their all time highs, the commercial traders (blue line) remain heavy heavy purchasers of stocks.
So when this correction has run its course, all I can say is LOAD UP on quality equities and if you are aggressive, put together a LEAPS portfolio.
When The Commercials Speak We HAVE TO LISTEN!
The Grains have reached a pivotal Technical point on the weekly chart and should prove to work sharply lower.
It appears that the all out second leg and collapse of grain prices is upon us.
The commercial traders remain steadfastly bearish and the big boys continue to forecast lower grain prices. LISTEN TO THE PEOPLE WHO KNOW!!
It appears that the all out second leg and collapse of grain prices is upon us.
The commercial traders remain steadfastly bearish and the big boys continue to forecast lower grain prices. LISTEN TO THE PEOPLE WHO KNOW!!
Steer Clear of Crude, Unless You SELL IT SHORT!!
Crude Oil, while frustrating at times, continues to show strong evidence of remaining in its bear market phase. It is safe to say that $80 was the secular bull market peak and currently crude is very close to starting its next bear market leg down.
Notice on the commercial data that the big boys have been heavy sellers and the not so sharp money has been buying up all the crude they can in order to get in on $100 crude prices that will NEVER come.
This market is doomed and will catch the vast majority off guard when it finally collapses.
Notice on the commercial data that the big boys have been heavy sellers and the not so sharp money has been buying up all the crude they can in order to get in on $100 crude prices that will NEVER come.
This market is doomed and will catch the vast majority off guard when it finally collapses.
Thursday, June 21, 2007
Get Ready To Pounce!
Lumber has proven to me that it has reversed its long term trend down and has begun a new uptrend.
The price should continue to pullback short term, but look to buy in the 258-266.5 area.
The price should continue to pullback short term, but look to buy in the 258-266.5 area.
When Will Crude Finally Break Matt, You Moron!!
I know, I know!
Crude Oil just keeps hanging on in price and seems to refuse to regress back to the mean!
Take heart, as all good things come to an end and the longer crude refuses to answer the call of the underlying fundamentals, then the harder the price will get hit when the wrath is bestowed upon it.
Long term I still look for $35 to$40 Crude.
Crude Oil just keeps hanging on in price and seems to refuse to regress back to the mean!
Take heart, as all good things come to an end and the longer crude refuses to answer the call of the underlying fundamentals, then the harder the price will get hit when the wrath is bestowed upon it.
Long term I still look for $35 to$40 Crude.
The Second Collapse in Corn Prices
If you missed the first leg down of the bear market in corn, here is another chance to jump on board for the second leg down.
This move down should be quite dynamic and could offer exponentially better profits than the first!
This move down should be quite dynamic and could offer exponentially better profits than the first!
Tuesday, June 19, 2007
FDG - Lighten The Load
Fording Coal has done very well for us, with a move from $22 to currently $31 or 41% in about 4 months.
It is time to perhaps scale back on the position as it shows signs of weakness and could move down to the $25 area.
If in fact it does move to the $25 area and shows signs of stabilizing, it will be time to get back into the stock. Long Term, FDG continues to have some real promise!!
As of now however I would be quite cautious.
It is time to perhaps scale back on the position as it shows signs of weakness and could move down to the $25 area.
If in fact it does move to the $25 area and shows signs of stabilizing, it will be time to get back into the stock. Long Term, FDG continues to have some real promise!!
As of now however I would be quite cautious.
Equities Continue to Tread Water
There still remains little doubt in my mind that the next major move in the equity markets will be down. The hedge we put in place should remain in place.
It is important to remember also that the down move that is on its way will be nothing more than a correction in an ongoing bull market. The long term indicators are still very bullish!!
As this market continues to chop around and go nowhere, the possibility of a mini crash. Look for a correction of at least 10% in the near future.
It is important to remember also that the down move that is on its way will be nothing more than a correction in an ongoing bull market. The long term indicators are still very bullish!!
As this market continues to chop around and go nowhere, the possibility of a mini crash. Look for a correction of at least 10% in the near future.
Wednesday, June 13, 2007
10 Year Note Looks to Have Bottomed
There is no doubt that the 10 year note broke in the opposite direction of which I had expected, but now there are clear strong indications that this market should have a healthy rally.
Take notice once more in the Blue Line at the bottom, which as we know represents the smart money. This Blue Line at the high for its range shows that the smart money is snapping up the 10 year note as fast as they are offered.
Look to go long!
Take notice once more in the Blue Line at the bottom, which as we know represents the smart money. This Blue Line at the high for its range shows that the smart money is snapping up the 10 year note as fast as they are offered.
Look to go long!
USEC Corp - Near A Buying Point
Aggressive traders can look to get back into USU as most of the downside targets have been met. More conservative investors will need a bit more proof before removing their bearish hedge and reestablishing their long positions.
The Equity Markets Continue to Top Out
While today was quite an impressive rally in terms of points, the condition of the market remains the same. Equities continue to put a major top into place and thus volatility will continue to be predominant.
It is important to remember that the longer equities chop around and do not break lower, the harder, steeper and faster the decline will be once stock prices do finally break!
Keep the Bearish Hedge in place and DO NOT GET SUCKERED INTO THE MARKET AT THIS POINT IN TIME!
It is important to remember that the longer equities chop around and do not break lower, the harder, steeper and faster the decline will be once stock prices do finally break!
Keep the Bearish Hedge in place and DO NOT GET SUCKERED INTO THE MARKET AT THIS POINT IN TIME!
Tuesday, June 12, 2007
Doomed Grains
The grains complex looks about ready to go through another collapse in prices.
Short Positions with a Tight Stop of 4.10 would be prudent.
The potential decline could be huge!
Short Positions with a Tight Stop of 4.10 would be prudent.
The potential decline could be huge!
Monday, June 11, 2007
Excellent Real Time Example
The current stock market action is an excellent example of a market putting in a high of some significance.
The telling signs are the wide spread swings that have occured over the last 2 weeks. The action today also was a clear indication of a trend shift in equity prices. The market opened weaker and moved considerably lower, only to stabilize and rally in a sizable fashion. The icing on the cake was the late day selling that brought the market negative once again.
This type of action is indicative of a shift out of the strong hands and into the weak hands. The average Joe has become so accustomed to the market snapping back after a brief pause that they are jumping back in with both feet only to have the smart money sell them their positions.
Although I do not anticipate this decline to be the start of a bear market, it does present enough risk to warrant a hedged equity position.
The equity market may chop around over the course of the next week, but the summer as a whole is not going to be pleasant for stock investors.
The telling signs are the wide spread swings that have occured over the last 2 weeks. The action today also was a clear indication of a trend shift in equity prices. The market opened weaker and moved considerably lower, only to stabilize and rally in a sizable fashion. The icing on the cake was the late day selling that brought the market negative once again.
This type of action is indicative of a shift out of the strong hands and into the weak hands. The average Joe has become so accustomed to the market snapping back after a brief pause that they are jumping back in with both feet only to have the smart money sell them their positions.
Although I do not anticipate this decline to be the start of a bear market, it does present enough risk to warrant a hedged equity position.
The equity market may chop around over the course of the next week, but the summer as a whole is not going to be pleasant for stock investors.
Wednesday, June 6, 2007
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