The mid week rally we were looking for materialized. Fridays action came on strong volume and the price action on former leader INTC was impressive in light of bearish views. Im still a believer that rallies must be sold but on the same note we must not let our opinions form our investing views. Let the market action (technicals) dictate on how we trade. Although we are still in correction mode always keep a watch list ready to use when price action warrants it. Look for stocks that show unusual strength in this recent corrections to possibly buy if the market does turnaround.
Can copper be breaking out? The chart of its ETF is making a strong case for it. JJC is forming a cup with handle. Not recommending a buy on it, (illiquid) but if it can break out could be foreshadowing a nice move for the commodities and possibly some economic growth ahead. Perhaps forecasting some interesting pro-business changes come November. MOO forming same type of bullish pattern. (Ag ETF)
Shorts that can be initiated into strength are: NETL @27.50 VLTR @23 CRUS @18 DLB @58 CAVM @25 SNDK @36 SBUX @24.50 CSX @51 KSU @35.50. Short stop on WFMI below 34.30.
Buy stops can be entered for: NVDA thru 10.45 ORLY thru 48.25 PXD thru 60.50 EBAY thru 24 KSS thru 48.25 MTL thru 24.25 DRQ thru 56 and VZ thru 30.48 exhibiting a nice double bottom w/handle formation. MRX forming a nice cup w/ handle formation as well. Buy stop thru 28.25 there. NZ gapped up (all time high, recent IPO in 8/07) on good earnings and can be bought near 19.
Stocks that have shown wonderful relative strength during this correction and behaved well near moving averages are. Winners holding and rebounding off their 50 day MA are: BIDU AAP SWKS CTSH IT CNQR RHT TIBX AN RIG EXPD ARUN DE VMED LVS ROVI ALV BWA TEN CIB. Stocks holding there 200 day MA are AAPL UNP RSG STRI. These are where youll find your winners IF this market turns itself around. Remember John Maynard Keynes famous line when the facts change, I change my mind. What do you do sir? If this market, and that is an IF, changes its mind and wants to go higher we will take the ride with it.
Good luck. Remember keep losses small and your emotions at home.
Author owns FCX, AVGO, AMT, AKAM
Saturday, August 28, 2010
Wednesday, August 25, 2010
Mid Day Thoughts
Market now must be looked at negatively after yesterdays late day selloff. Classic bear market action. A bounce can happen til end of the week but that should be looked at as a shorting opportunity. However lets try to find some strength that might hold up in the short term for a trade. Look for RBCN to sniff out its 200 day at find support near 23.50. AMT has held its 50 day. I think some decent risk reward plays are buying RIG and putting stop in at yesterdays 49.74 low and HAS can be bought against its 40.15 low today. ROVI held its 50 day today and can be played against its 41.00 low today. ISLN and IT holding up well today. INTU near 41.50 looks buyable. EXPD VMED VRSN are holding their 50 day.
Stocks that can be shorted as they move back to their 200MA include BRCM SBUX NETL VLTR CAVM CAKE
Good luck.
The author holds positions in FCX, AVGO, AMT, AKAM
Stocks that can be shorted as they move back to their 200MA include BRCM SBUX NETL VLTR CAVM CAKE
Good luck.
The author holds positions in FCX, AVGO, AMT, AKAM
To Privatize, or not to Privatize
As Social Security enjoys its 75th birthday, a debate is in the works. At stake is privatization of the United States' largest government program. The left rejoices and celebrates its longevity, while some on the right look to reform the plan which has existed since FDR signed it into law in 1935. Let's scrutinize the possible benefits of privatizing a bill that basically hasn't changed, much in the U.S. has.
When Social Security was created, the staying power of the program wasn't in doubt. At its inception, 17 employees were providing benefits for one retiree. The ratio is now a disturbing 3 to 1. The numbers in the future cast even more doubt as the U.S. population (in the 65 yr. old category) is expected to grow from today's 40.2 million to 81.2 million in 2040. Recent polls indicate that less than 40% of Americans believe Social Security will be here for them when it comes time to retire. Change is on the minds of many. But why are our politicians not listening to their citizens when more than half are voicing concern?
Front and center in the argument is the government role in the retirement process. Government now routinely uses surpluses from the Social Security Trust Fund to finance other non-related spending projects. Your tax dollars, which are supposed to be put away for your retirement, are being spent by power hungry Congressman and will have to be reimbursed through higher taxes. The government also, under law, has the right at anytime to collect the money you put into the system, essentially revoking your rights. Private property in the hands of government bureaucrats never sounds like a good idea.
The advantages of privatization are numerous. It empowers individuals (who, if they choose, can stay in the traditional Social Security plan) to make the decisions they feel are necessary about THEIR retirement. As, let's face it, it is their money. Opponents on the left voice unease about stock market volatility and being held at the mercy of Wall Street traders. Fact is, these accounts would allow investors only the opportunity to invest in diversified fixed income securities or mutual funds and not individual equities. Adding money into American capital markets would strengthen our financial system and boost stock indexes. Employees and their employers now pay a 6.2% payroll tax (seen our your work pay stub as FICA tax) into Social Security. Privatizing, and at the same time eliminating the combined 12.4% tax, would be a shot in the arm for individuals and corporations while at the same time limiting the reach of the Washington spending machine.
More than 30 countries around the world have recently adopted a privatized Social Security reform. Let's make it clear that here in the U.S., when the right speaks about privatizing it's only partial privatizing as about 1/3 of your FICA tax would go into your own personal account. Additionally, 3 counties in Texas opted out of Social Security before Congress enacted rules in 1983 preventing that choice (under FDR's New Deal, municipalities were permitted to leave Social Security). The results in the county of Galveston, Texas have been and continue to be encouraging. Returns outperformed what Social Security would have provided. Benefits are more valuable, while at the same time reducing the government's need for taxpayer funds. The finances in this county remain stellar and look strong going forward. Noteworthy in this case is this fragile economy, but most importantly is the Galveston residents' ability to control their own retirement destiny.
The argument surrounding privatization will continue for years to come. Wisconsin Senator Paul Ryan is the lone voice in the Republican party trying to tackle this eventual disaster. Political will is in short supply with the November elections looming, but the major issue in this controversy is government intrusion into our personal property. The guarantee-free confiscation of our hard earned money seems like a real crummy deal to me.
When Social Security was created, the staying power of the program wasn't in doubt. At its inception, 17 employees were providing benefits for one retiree. The ratio is now a disturbing 3 to 1. The numbers in the future cast even more doubt as the U.S. population (in the 65 yr. old category) is expected to grow from today's 40.2 million to 81.2 million in 2040. Recent polls indicate that less than 40% of Americans believe Social Security will be here for them when it comes time to retire. Change is on the minds of many. But why are our politicians not listening to their citizens when more than half are voicing concern?
Front and center in the argument is the government role in the retirement process. Government now routinely uses surpluses from the Social Security Trust Fund to finance other non-related spending projects. Your tax dollars, which are supposed to be put away for your retirement, are being spent by power hungry Congressman and will have to be reimbursed through higher taxes. The government also, under law, has the right at anytime to collect the money you put into the system, essentially revoking your rights. Private property in the hands of government bureaucrats never sounds like a good idea.
The advantages of privatization are numerous. It empowers individuals (who, if they choose, can stay in the traditional Social Security plan) to make the decisions they feel are necessary about THEIR retirement. As, let's face it, it is their money. Opponents on the left voice unease about stock market volatility and being held at the mercy of Wall Street traders. Fact is, these accounts would allow investors only the opportunity to invest in diversified fixed income securities or mutual funds and not individual equities. Adding money into American capital markets would strengthen our financial system and boost stock indexes. Employees and their employers now pay a 6.2% payroll tax (seen our your work pay stub as FICA tax) into Social Security. Privatizing, and at the same time eliminating the combined 12.4% tax, would be a shot in the arm for individuals and corporations while at the same time limiting the reach of the Washington spending machine.
More than 30 countries around the world have recently adopted a privatized Social Security reform. Let's make it clear that here in the U.S., when the right speaks about privatizing it's only partial privatizing as about 1/3 of your FICA tax would go into your own personal account. Additionally, 3 counties in Texas opted out of Social Security before Congress enacted rules in 1983 preventing that choice (under FDR's New Deal, municipalities were permitted to leave Social Security). The results in the county of Galveston, Texas have been and continue to be encouraging. Returns outperformed what Social Security would have provided. Benefits are more valuable, while at the same time reducing the government's need for taxpayer funds. The finances in this county remain stellar and look strong going forward. Noteworthy in this case is this fragile economy, but most importantly is the Galveston residents' ability to control their own retirement destiny.
The argument surrounding privatization will continue for years to come. Wisconsin Senator Paul Ryan is the lone voice in the Republican party trying to tackle this eventual disaster. Political will is in short supply with the November elections looming, but the major issue in this controversy is government intrusion into our personal property. The guarantee-free confiscation of our hard earned money seems like a real crummy deal to me.
Monday, August 23, 2010
Reccomendations
Todays market action left a lot to be desired. Lots of Nasdaq leaders reversed and closed upon the lows. Forget about the old tech leaders like MSFT, CSCO, DELL, HPQ. They are yesterdays news. But when I look at an AAPL chart concern starts to set in. To boot the action in DE and CAT made the market action even more ominous. The only silver lining was that volume was extremely slow indicative of the summer doldrums.
One needs to always be on the lookout for strength on a weak tape. Some recent IPOs continue to show strong action. Watch OPEN JKS STRI and now a software IPO QLIK.
A pair trade I have is long STRI, short TSL. TSL had a bearish outside reversal day today, while STRI continues its uptrend.
INFA continued its winning ways. CHKP finished above its 35.09 buy point on decent volume today on a weak tape. CIB continues to rebound after its low volume descent to its 50 day MA.
Stocks setting up for specific buy points are: LXK with a 39.48 double bottom with handle. TSCO with a 72.49 cup with handle.
Stocks that can be bought at certain prices on weakness are: CTSH 57, HAS 41.25, ISLN 19, ADTN 29.70, IT 27.30, SWN here, INTU 41.50, VMED 19.
Shorts that can be put on are: CRUS 17, CAKE 23.50, ORLY 48, GES 39.50, and a short stop can be placed on FAST at 46.50. BA is losing its battle with the 200 day MA. Short into weakness.
Good luck.
The author holds positions in FCX, AVGO, AMT, AKAM
One needs to always be on the lookout for strength on a weak tape. Some recent IPOs continue to show strong action. Watch OPEN JKS STRI and now a software IPO QLIK.
A pair trade I have is long STRI, short TSL. TSL had a bearish outside reversal day today, while STRI continues its uptrend.
INFA continued its winning ways. CHKP finished above its 35.09 buy point on decent volume today on a weak tape. CIB continues to rebound after its low volume descent to its 50 day MA.
Stocks setting up for specific buy points are: LXK with a 39.48 double bottom with handle. TSCO with a 72.49 cup with handle.
Stocks that can be bought at certain prices on weakness are: CTSH 57, HAS 41.25, ISLN 19, ADTN 29.70, IT 27.30, SWN here, INTU 41.50, VMED 19.
Shorts that can be put on are: CRUS 17, CAKE 23.50, ORLY 48, GES 39.50, and a short stop can be placed on FAST at 46.50. BA is losing its battle with the 200 day MA. Short into weakness.
Good luck.
The author holds positions in FCX, AVGO, AMT, AKAM
Saturday, August 21, 2010
Reccomendations
A soft week for the stock market exposed some resilient groups. Most significant was the software group. Led by INTC $7.7B offer for MFE, and an earnings romp by CRM, the batch shined. Others in the sector that warrant purchases on pullbacks include VMW, CTXS, INFA, INTU, RHT, ROVI, TIBX, VRSN. Specific spots can be ADSK @27.50, CNQR @45.50.
The uptrend tenuously remains intact. It remains suspect however. But as always we will let the charts determine the future direction of the rally. Stocks that can be bought and prices are:
HAS @42
CXO @58
FTI @59
RBCN @24
FAST @47.50
CMCSA here
FNSR here
ARUN here
CHRW @65
BUCY @59
BWA @44
PCAR @41
Chips remain weak and should be shorted into strength. NETL, CRUS @18, CAVM @25, ATHR @28 and retailer BBBY @39.50. BA holding onto to its 200 day MA. Its found support there numerous times. If it fails watch out. Short stop BA@ 63.25.
Buy stops can be entered on the following:
DRQ thru 55.50
NVDA thru 10.50
ORLY thru 48.60
TJX thru 43.25
WYNN 94.08, in a nice cup with handle formation
TIF 44.67, in a nice double bottom with handle formation
Good luck.
The author holds positions in FCX, AVGO, AMT, AKAM
The uptrend tenuously remains intact. It remains suspect however. But as always we will let the charts determine the future direction of the rally. Stocks that can be bought and prices are:
HAS @42
CXO @58
FTI @59
RBCN @24
FAST @47.50
CMCSA here
FNSR here
ARUN here
CHRW @65
BUCY @59
BWA @44
PCAR @41
Chips remain weak and should be shorted into strength. NETL, CRUS @18, CAVM @25, ATHR @28 and retailer BBBY @39.50. BA holding onto to its 200 day MA. Its found support there numerous times. If it fails watch out. Short stop BA@ 63.25.
Buy stops can be entered on the following:
DRQ thru 55.50
NVDA thru 10.50
ORLY thru 48.60
TJX thru 43.25
WYNN 94.08, in a nice cup with handle formation
TIF 44.67, in a nice double bottom with handle formation
Good luck.
The author holds positions in FCX, AVGO, AMT, AKAM
Tuesday, August 17, 2010
Reccomendations
Place Buy Stops for the following:
NEM 59
DRQ 55.50
CHKP 35.09
DTV 39.99
MTL 24
NUE 40.25
Buys:
SWKS here
VMED here
ARUN 17
ROVI 42
WLT 76
UPL 41
APA 91.50
SWN 34
HAL 28
Shorts:
NETL 26
VLTR 22
NTAP 40.50
CAVM 25
BBBY 39
CAKE 24
DLTR 42
Good luck.
Author holds positions in FCX, AVGO, AMT
NEM 59
DRQ 55.50
CHKP 35.09
DTV 39.99
MTL 24
NUE 40.25
Buys:
SWKS here
VMED here
ARUN 17
ROVI 42
WLT 76
UPL 41
APA 91.50
SWN 34
HAL 28
Shorts:
NETL 26
VLTR 22
NTAP 40.50
CAVM 25
BBBY 39
CAKE 24
DLTR 42
Good luck.
Author holds positions in FCX, AVGO, AMT
Misconceptions of a Movement
When a "party" that's still in its infancy collects this much attention from the mainstream media, its time to investigate. The tea party movement, barely 2 years old, is one that's generally misunderstood. Being so young, it seems logical that there's confusion. The organization is portrayed as being right wing and associated with the GOP. But let's dig a little deeper and try to analyze the group's true ambitions.
With Obama's massive $786 billion stimulus bill came the start of the Tea Party movement. Disillusioned Americans worried about their liberties and their wallets and their government spoke out. Concerned with Washington's expanding power - seen as an assault upon almost all aspects of life - the group created a doctrine. Here are some of the most important beliefs that capture the essence of the party's primary focus (for further detail, look at the Tea Party Movement website: http://www.thecontract.org/the-contract-from-america/). 1.) Protect the Constitution. 2.) Reject cap and trade. 3.) Demand a balanced budget. 4.) Enact fundamental tax reform. 5.) Restore fiscal responsibility and Constitutionally limited government in Washington. 6.) End runaway government spending. 7.) Defund, repeal, and replace government-run health care. 8.) Pass an "all of the above" energy policy (yes that means all alternative energy sources). 9.) Stop the Pork (reduce earmarks). 10.) Stop the tax hikes. As you can see, it's not as radical an agenda as the popular media would have you believe. In fact it seems like a fair, reasonable and responsible way any decent nation should function.
The Tea Party's philosophy almost has a Reagan-esque feel to it. Reduce taxes, diminish government and curb spending. The grassroots organization is already making its presence felt on the political stage. Benefiting from the wave of popularity are these Senate hopefuls running on the Republican ticket - Sharon Angle of Nevada, Nikki Haley of South Carolina (a 38 year old Indian-American), and Scott Brown of Massachusetts (who had a shocking victory for the Senate seat held by the late Ted Kennedy), just to name a few. However, the party has maintained its independence, as Democrats aim to co-mingle Tea Partiers with the Republican party for political purposes. Recent polls find that 40% of Tea Party members are either Democrat or Independent. Fact is, most Tea party members are political novices - volunteers who just want their country restored to the economic and social integrity it was once known for.
As the important November mid-term elections draw near, the Democrats will paint close comparisons between the Tea Party and several Republican candidates; especially those that are close in pivotal states. Colorado, Nevada, Kentucky and California can all expect a Tea Party-Republican love affair to dominate the headlines. So far the connection, rightly or wrongly asserted, has not hurt Republicans (or Democrats either, for that matter). To the average Tea Party member, that's a good thing. To have their own autonomous voice, free from the noise of both parties, and to deliver a message similar to the one our founding fathers did when they created this great nation is a great accomplishment. Seems to me, they are on exactly the right path.
With Obama's massive $786 billion stimulus bill came the start of the Tea Party movement. Disillusioned Americans worried about their liberties and their wallets and their government spoke out. Concerned with Washington's expanding power - seen as an assault upon almost all aspects of life - the group created a doctrine. Here are some of the most important beliefs that capture the essence of the party's primary focus (for further detail, look at the Tea Party Movement website: http://www.thecontract.org/the-contract-from-america/). 1.) Protect the Constitution. 2.) Reject cap and trade. 3.) Demand a balanced budget. 4.) Enact fundamental tax reform. 5.) Restore fiscal responsibility and Constitutionally limited government in Washington. 6.) End runaway government spending. 7.) Defund, repeal, and replace government-run health care. 8.) Pass an "all of the above" energy policy (yes that means all alternative energy sources). 9.) Stop the Pork (reduce earmarks). 10.) Stop the tax hikes. As you can see, it's not as radical an agenda as the popular media would have you believe. In fact it seems like a fair, reasonable and responsible way any decent nation should function.
The Tea Party's philosophy almost has a Reagan-esque feel to it. Reduce taxes, diminish government and curb spending. The grassroots organization is already making its presence felt on the political stage. Benefiting from the wave of popularity are these Senate hopefuls running on the Republican ticket - Sharon Angle of Nevada, Nikki Haley of South Carolina (a 38 year old Indian-American), and Scott Brown of Massachusetts (who had a shocking victory for the Senate seat held by the late Ted Kennedy), just to name a few. However, the party has maintained its independence, as Democrats aim to co-mingle Tea Partiers with the Republican party for political purposes. Recent polls find that 40% of Tea Party members are either Democrat or Independent. Fact is, most Tea party members are political novices - volunteers who just want their country restored to the economic and social integrity it was once known for.
As the important November mid-term elections draw near, the Democrats will paint close comparisons between the Tea Party and several Republican candidates; especially those that are close in pivotal states. Colorado, Nevada, Kentucky and California can all expect a Tea Party-Republican love affair to dominate the headlines. So far the connection, rightly or wrongly asserted, has not hurt Republicans (or Democrats either, for that matter). To the average Tea Party member, that's a good thing. To have their own autonomous voice, free from the noise of both parties, and to deliver a message similar to the one our founding fathers did when they created this great nation is a great accomplishment. Seems to me, they are on exactly the right path.
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