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Back and Forth, More of the Same
Same old battle being played out by the Robots gunning "inflation" or "deflation" on a 15-min. chart in real time. Huge herds running back and forth, being spooked by various Fed Head jawboning, Central Bank threatening, financial channel chattering, etc.
Yesterday, it was "Dollar is rallying big!! Sell stocks! Sell Euros!!, Sell gold!, Sell oil!, etc."
Today, it was "Dollar is crashing! Buy commodities! Sell bonds!!"...
Markets seem to be in a state of mass confusion. Some stocks going ballistic, others getting killed.
Just look at the action in the banks today. Is it back to lending to everyone, good times ahead? Or is it back to another financial sector implosion??
Which is it?? V-shaped recovery? Or back to the "Deflationary Bust"??
"I love those sexy chip stocks!!"
"Housing is going down another 30%!!! Get Out!!!"
Who knows where we go from here?????
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Look at my faves, the MIs (MTG, RDN, PMI), those buggers are in a death twitch now, making +/- 5% moves an hour, on the way to zero.
Any value in those companies is going to the bondholders.
Take a look at TQNT after hours. OUCH!! The beloved semis are getting spanked.
7 cents earnings * 4 = 28 cents annualized earnings.
28 * 20PE = 5.60.
Yeah, doesn't look like 8.50 was supportable.
We need to set up a thread on good shorts, I only follow those in my industry.
I am not a big equity trader, and have no idea what "the market" is going to do, but there has to be a lot of junk out there that rallied with the good stuff, a la fall 2001.
The companies I mentioned, PMI, RDN, MTG, are all down nearly 50% in the past 2-3 weeks. That is a lot of short money that was available.
World markets are down , has the dumping started for black friday...-20% AH is big for increased market share
Hmm, that's a tough one - because most of the good info for shorting comes from inside stuff that would never be posted on a site like this (or any, really).
Funny TQNT came up here; that has been talked about a lot recently as a return to 1999/2000 bubbles, as there is no way that this company can grow close to enough to justify the valuation now (and I really appreciated last week's GaAs comment from Tyler on MCC). You should start to see similar pullbacks in their space by the hot money brothers - RFMD, ANAD, AMCC, PMCS... But those aren't as good of candidates as TQNT was (maybe ANAD, arguable).
Most of my other good names have just been hit finally. MI & TWIN I knew by local knowledge. JOYG, BUCY, HOG aren't recovering one bit, but they have stories for investors to hold on for better times (awesome customer bases & dominant market share). I would say that CNH and BC are ones I'd keep an eye on for a return to more realistic valuations going forward. I did take positions against both today. MTG you already mentioned and I'm keeping my position against it in place.
For non-local, no-connection obvious names - airlines are the first I'd discuss. Then some of the hotel and mall REITs. If one has a brass set and good connections in prime brokerage... the leveraged bearish ETFs on metals, energy, various commodities are always highly attractive. And there's always the bonus of a black swan blowup by one of the counterparties.
When RDN got to $12 a few weeks ago I could have told you it was a guaranteed short. I bought some puts and cashed out at a 100% gain. It didn't take any inside knowledge, though I know more than most about the mortgage industry, but all you needed was to look at some trends.
One can easily look at their book of business relative to similar books in the industry (like FNM/FRE or any securitized deal) and see where losses are going. But the market was valuing their equity at $1B, while they have 750M of debt they need to redeem 250/250/250 in 2011/13/15. They don't have enough cash at the holding company, and their operating sub can't release dividends for years.
I could go on, but in any case, this was an obvious short.
MBI was another one - the market cap on that got up to 1.8B - the company is in runoff and filing lawsuits left and right to survive.
I just wish I could find more of these. Most of the meat is off the bone on those guys. But thanks for the other names, I will investigate them.
These will be zeros for bondholders.
well... http://www.businessinsider.com/goldman-sachs-cut-back-their-commodity-ex... laws of gravity have not been canceled, yet. PIMCO called off its bluff, now GS did. Maybe the last 45 min of today's market is an indicator that someone did notice and took their sweet time to reset the boots. Duh, fat chance..
those pictures made me lol
I can sense your frustration.
If it's any comfort I've just had two weeks of unnaturally successful (lucky) market timing profits wiped out in one hour. Never saw it coming.
My ass still feels sore.
W
don't you people get it? these MoMo algorithms are essentially stop finding machines.
they don't care about a direction, they are looking for a hole in the order flow to exploit, they find it, then they push in HEAVY and the stops make it a self fufilling prophecy.
this morning was a perfect example, massive short interest in the morning trade, lets blow them out of the water , grab shorts at the top and watch the whole thing fall to shit as any bears had been stopped out and capitulated
A little - very slight little - of my sanity is being restored after watching MI & TWIN after their earnings this week.
And, yes, the MIs and Airlines.
Perfect signal to sell short???
Robo,
why did you pick two charts that look - for now - good to ask for shorting?
The uptrend in tech and energy does not look broken at all.
Banks and transportation are way weaker thus better shorting candidates.
the reason is they have moved from high beta to semi-respectable to blue chip explosion (CAT, GOOG, DE, etc). Remember the flight to quality in march of 2000. Everyone ran to AOL, CSCO and SUNW. Last gasp baby.
My two cents since you ask:
Do you see an out of control deflationary spiral being allowed from here? I doubt it very much and whatever massive cracks we see I expect will come from currency / interest rates / politics. I don't think we are anywhere near breaking point on these fronts yet.
I see three possible scenarios playing out:
1 - As anonymous above wrote, today was a successful stop feeding frenzy. An emotional fall at the open will be followed by an unexplained rally that will bring SPX to a very convenient 1100 for option expiry. This is what I am preparing for (the rebound) but I will use options. I've experienced enough ass-whipping for the week and need a break :-)
2 - Feinberg's proposed compensation cuts have not been well received in Wall Street. Said streeters want to teach the White House a lesson on the fragility of the finance industry and the need to retain critical talent with still very reasonable multi million dollar compensations.
3 - I haven't got a clue and the market will do what it will (my favourite).
Either way, you may be right but 'perfect' is not the word I would use in the current context.
Hope this helps.
W
was whipsawwed hopelessly in this filth today, up huge then looked away to make a sandwhich, that was my mistake. Never look away, have a monitor by the crapper, open a trading screen in the shower; I must remember these bylaws. Also whenever at a significant round number always hedge since in 10 minutes you could be under mortar attack by Wall Street PigMen intent on program-trading your sorry ass into oblivion.
A. never leave the terminal when its cash market.
B. don't blow your load on one exit , a stock position is just like managing product inventory, you start to sell some when your product is just getting known, sell some when its red hot, and sell some when it may be going out of style
Happened to me with an energy stock a while's back. Tried to get in well under 30, went to take a shower, barely twenty minutes!! It had breaking news, dropped to 13 (!!!) then whipsawed back to the high 20's! [NYSE: CEG]
Been there... amazing!
just like a pump.
what did he say, wear 'em out so they won't have the energy advantage.
who's the blond chick robo trader?
The pictures of the bulls rushing out and then rushing in were classic. Herd mentality baby!
Those are Wildebeasts, possibly crossing the Mari river. Where were the alligators?
Thats been penned as the greatest show on earth. I have seen it and it is amazing. The alligators do fill thier belly for a long whole year.
All the Reptiles are holidaying in Wall Street!
Robo why the 10 day charts? That's a very long time frame. Plus those 1 year charts... wow. I know the market is up a lot and its total bullshit. I don't care. The dollar is down and central banks of the world are printing like crazy, hence the strong market. I'd rather look at 2 day charts with 5 minute intervals because there's money to be made. Take a look at the 2 day chart of GS and it was an obvious short at 2:30 today for a nice 3 point drop. There's money to be made, but buy and hold (or sell and hold) is for fools.
What happened at PRECISELY 3pm to send SRS S-O-A-R-I-N-G and Simon Property Group (Moriarty to SRS's Holmes) plunging? A bunch of other stocks moved at that time too.
I kinda like this: volatility! Stocks now reversing course mid-way (or later!) through the session! No more of this continuous ramp-up or squash-down from morning till close anymore. Rather reminds me of....September 2008! Great for picking up early bargains or selling later losers...
I'm heavy into SRS contracts.
Simon is trading at a +- 6.75% cap rate. Huge disconnect from private market.
My assumption is that the MAC announcement was filed with the 8-K prior to the actual press release.
If their secondary fails, I'm gonna pee myself with glee.
The whole market started dumping on the news of the Pay Czar cutting pay 90% on execs who were the biggest TARP benes. Actually, SPG was late to the selloff by a little bit (and still outperformed the other IYR top 10, which were all red while SPG was green). Financials really rolled over a little later with the WFC sell call.
Anyone think CNBC is going to have the Dow 10,000 hats waiting in the green room tomorrow?
Dennis Kneale wears that hat as flair when he works weekends at TGIF's in Trenton. He's still got the original one from 1999.
this morning was a perfect example, massive short interest in the morning trade, lets blow them out of the water , grab shorts at the top and watch the whole thing fall to shit as any bears had been stopped out and capitulated....
what is a good place to see short interest charts?
Where'd you get Delta Goodrem? Not a stock bimbo...! But nice voice.
I love it....bite the hand that feeds you. The 7 Zombies will show the ape pay czar. Not that those f/ups deserve a forint! It is just the czar causing class conflict cataclysm.