Click chart to enlarge It's too early to be sure yet, but it looks like the Dow has broken down. We need a close below the trendline and a down day tomorrow. At that point, the recent short term rally will be over... typical bear market action.
51 comments:
AGs, miners, commodities rally begins.
maybe...
the money rotates back into these sectors imho...
We need 2 days of upward movement to know for sure.... Amazingly enough, we have not had 2 consecutive days of gains in OIL since the correction began.
Snot- did you buy DXD?
I really have no idea what is going on in this market. I sold all my AG and bought a short AG etf and now I am underwater on that. What the %$#@! Are we now going back to the same old game plan? ........
Totally breaking all Snot rules this week I was buying XTO SLV UNG SWC. Metals and energy. They just looked so cheap to me. Oil and gas are not going to stay down forever and silver is like a play on gold but there is more room for it to run. I can't find anything in the market that looks safe right now. The thought that tech or retail or for that matter anything else is going to be the new winner without higher energy and metals...it does not make sense. How could it be? it is a total conflict of interest. If you need to make more stuff you need more energy and metals. Even in bad times people will still need energy they have to buy gas to heat their home, and if it is looking really grim I bet they may look to precious metals. Well I don't know. Today made me look like a genius but I am sure tomorrow it will all be in the red. Tighten up my stops.
Now if I had lots of money I might also buy that cattle ranch in Peru or that Costa Rican Banana Plantation. Snots probably sipping a pina colada, swinging in a hammock right now...me I gotta go chop wood. Supposed to be in the 40's tonight. Damn
Snot, are your current allocations accurate?
Why would you sell AG when oil just began a new rally?
Anyway, Snot, check out FRED.
I sold my AG on August 4th when the break down started. The thing is that the major breakdown never really happened the way I anticipated. Yes Ag did take a beating but based on how people were talking I was in fear AG would just drop off the cliff. Look at oil and some of the metals. In no time a lot of them are down 50%. AG has certainly taken a hit but seems to have hit some resistance fairly quickly. What I am asking?.... is that it? are we back to having them move up from here? If you have followed this blog you know that Ag was really the only stock play that we have been following for quite some time. I am just wondering if like Lazarus POT , CF and the like are rising from the grave.
hey everyone, been following here for a while... great blog, I've really enjoyed some past discussions.
we've started a blog of our own, feel free to stop by:
http://skytraders.blogspot.com/
it's more just an easy way for us to keep track of recent ideas, but in the end we're hoping it generates some good back & forth. Especially if you disagree with something, please leave a comment!
CF Industries Holdings Inc. (CF) - a maker of nitrogen and phosphate fertilizer - will be added to Standard & Poor's 500 Index, replacing Electronic Data Systems Corp. (EDS), which is being acquired by Hewlett-Packard Co (HPQ). Government services contractor SAIC Inc. (SAI) will replace CF in the S&P MidCap 400.
With UYG at 21.20, SKF is a good idea. I would start a 25% position in SKF @ 118, with room to maneuver from 118 to 106.
I am picking up a bullish signal for DDM. The signal is the same strength as the Aug 12 bearish signal.
Where are you picking up your bullish signal from, anonymous?
Anonymous
where is freaking Snot!
He cant just left us hanging here say something.
Is the bullish signal from anonymous AM, FM or satellite?
Where is all the Ag, Steel & Fert money running to??
they ran to the crooked wall street manipulators!
U have been cheated and lied and manipulated.
And some bastard govt officials.
A lot of the money is being sucked back into the black hole of financials. But that money is basically going to disappear too. According to google finance, both Energy and Basic Materials lost 5% yesterday. Utilities lost close to 2%. And Tech lost 1.2%. The only sector that really gained yesterday was "Conglomerates", and that was only a paltry 1.4%.
This is where deflation comes from. I am amazed all this happened on a day when the DOW only lost 50 points. Every time something like this happens, it increases the likelihood of a market crash.
The VIX is is heading north again... already! I got my SKF and FXP, and I'm not letting go of it this time!
Where's Snot????!
- stoptazzer
anyone else catch the fert drop today? what a ride...
where do you see them heading from here? My guess is some chop before heading back down.
Well if you believe that all bubbles take as long to deflate as they do to inflate, then ferts have fallen too fast. MOS has fallen to its Jan average. POT has fallen to its Feb average. Oil is still at its April average.
All bubbles take much LESS time to deflate than inflate.
http://www.chrismartenson.com/bubbles
Looks like Christmas is coming early this year! Hope everyone has their shopping lists ready.
Plenty of downside left in the Ferts, don't kid yourself.
no kidding, stocks fall MUCH faster than they rise-- fear is more powerful than greed!
I thought for sure we'd bounce or at least go flat today, so I stayed away. D'oh!
Anyone catch the drop again today?
See you back on the short side, after we catch a little bounce (sometime REALLY soon now, I expect).
What are you thinking?
We're here, just not active. The ferts will probably bounce at some point, but it'll just be a bear trap. They are headed to $0.
The only thing we're doing in this market is waiting it out while keeping our eyes open for the next big thing. It could still be quite a while (a year or more) before it's worth getting back into the market. If your assets allow for it, you should be taking advantage of the attractively priced real estate market right now instead of focusing on the stock market.
We don't see the economy improving in a marked way for a long time. There are no candidates left that could improve our situation. Obama's tax hikes will surely keep Americans under immense financial pressure for at least the next 4 years. McCain isn't focused on helping the economy, but at least he is not focused on completely destroying it. Our future looks very bleak right now, and it does not signal a bottom in the market. Unfortunately, it is real this time. We need another American-led revolution, like the industrial or internet revolutions. Until then, Americans will have to be content with having less.
If your confident of this line of thinking why are you not shorting the market? Seems like that would be where the money is. I know you do not short individual stocks but you do use short index ETF's .....why are you not into those?
The SKF has been a beauty lately, seems to have $10 intraday movement consistently.
But you need to keep a close eye and a very tight leash on it. Definitely for day traders, not investors because on the day that Hammerin' Hank Paulson finally fires his "bazooka" at Fannie & Freddie that he keeps spouting off about this thing will crash and burn like the Hindenburg.
Next spring may be time to get back into buying real estate. There's more downside before then. It also depends on where and what segment of the market. Florida and a lot of California are down a lot, but more desirable areas in CA still have a lot more to fall because they've been stubborn and are still ridiculous. Areas like Seattle and Charlotte are just beginning their downside. On the other hand, I've seen parts of CA and Florida with 50-60% haircuts already.
Snot, are your CF, DDM and SMN "current allocations" accurate? Or are you completely out? Aren't you a fan of inverse ETF's in a time like this?
Snot,
Not sure if you agree with this assessment, but our old friend LDK *MAY* be starting to build a multi-year ascent. It seems to be gaining more institutional support, and is less of the bastard child it once was. Most of the critiques of the past (accounting problems, doubts about polysilicon production) are either being forgotten or will soon be addressed. Plus, the growth story is still there at least in theory (projections). There may be issues with the world economies, but I think people still see alternative energies as necessary in the near future (at least the US pres candidates are making noise) even in a soft economy. Therefore, I believe the government support will still be there. There's probably a good chance that grid-parity will be achieved if we wait long enough anyway, so that shouldn't be a game ender anyway. We'll have to see if the March bottom around 20 really was the start of a large new trend or not by watching if it stays above the March/Aug lows line. There may be concern going forward that demand will not keep up with production, so caution is perhaps warranted. I see grid-parity as the tipping point where this no longer is a major issue. As of now, I am cautiously optimistic about LDK's future even with falling markets and look for further confirmation of the trend. Any thoughts on whether you think this may (now) be the next big thing or am I totally off-base?
Days like today are no doubt why Snot isnt going hog-wild on the inverse ETFs. Because the market is irrational. The bailouts of FNM and FRE should not cause the market to rally, and definately should not cause financials to rally. Yet financials have been generating buy signals all last week. Until now I could not understand why.
The bailouts of FNM & FRE should not cause the market to rally? Should not cause the financials to rally? If you really believe that then you are truly clueless.
I mean my god C.L.arke- the sky has stopped falling already!!!
I think your last sentence summed it up best "...I could not understand why"
YOU GOT THAT RIGHT!! LOLOL
It's doubtful the fins provided you with "buy signals" last week. Did you buy? No. So obviously they weren't "buy signals" or you'd have bought something! No one was expecting the bailout to come this soon, obviously, so the shorts are caught with their pants down and are going to be covering like mad because they seem to know what you dont't. That it won't be profitable to be short the fins any longer, so it's time to cover and go long. If the biggest failure/takeover in history isn't a permanent game changer then nothing is.
I love how everyone on here can claim after the fact that they saw "buy signals" yet they NEVER have any explanation for what they are, even after being repeatedly asked on here exactly WHAT "buy signals" they claim to have seen. Okay, I'll play too:
"I saw buy signals for AOL, Microsoft, Cisco and QCOM ALL at their IPOs!!"
this will help but it isn't the final answer.
Anyone out there buying the SKF this morning? This may be one of those explosive opens that peters out all day as everyone comes back down to reality.
Plop plop fizz fizzzzzzzzzzzzzzzzle
That SKF is fun to trade every single day.
We do still hold some DDM and SMN, but the allocation at the left of the screen wasn't accurate. We're basically in cash and have been since the Ag breakdown. The remaining SMN and DDM are small amounts that got left over in the account. We are eyeing DXD, and will pull the trigger if it gets anywhere near the 200dma. Until then, we're just waiting on the sidelines. We still believe that the U.S. economy is in such poor shape that it will be 2-3 years before it makes even small improvements. The inevitable Obama tax hikes are going to keep the U.S. consumer at bay for years to come. We believe that now is no time to be in the market, and that the Dow will get close to 10,000 before the weakness is over. Little rallies like the one we had today are nothing to write home about. This is still a market in which you want to short the rallies rather than buy the dips. We're in a prolonged bear, and the recent collapse (call it what you want) of FRE and FNM are just the latest failures in an ongoing deterioration of our financial infrastructure. We would much rather buy real estate now than be long the stock market.
And we still maintain that the Ag/fert plays have been forgotten and are slowly headed to single digits regardless of fundamentals.
Congratulations and thank you snot for the advices!
You were right about the ags, they are falling like a knife.
Do you think this is a bursting bubble? And the commodities, miners?
They are falling too. -5-10% a day, pretty...
It's not a "bursting" bubble, it's a bubble that has already burst, and it will never come back.
The problem with stocks is that they have no intrinsic value. If a stock is priced at $100 a share, only about 20 cents of that $100 reflects the actual value of the company's assets. The rest of it is relative value and momentum, which have no value to an investor on the wrong side of the trade. If we could short individual stocks, we would short the fertilizer stocks on a rally. They are due for a short term bounce, but they are headed to single digits... all of them.
We recommend buying real estate in times like this because unlike stocks, real estate does have intrinsic value. There are some good deals out there, too. Perhaps even some steals if you put a little effort into seeking them out.
Snot,
I love to read your analysis. You should write more. Thanks
Hey snot,
Curious, why you say stocks have no intrinsic value?
The commodity correction from high to low is still well contained with 50% longer term and if you look back in 2005, we had one such correction in oil. I am not saying they could not go down further. But I don't see a "bubble". I am not taking sides here, infact I am probably switching sides. If you remember I was probably alone on this board, when I said the oil chart was looking very bearish and listed my reasons why it was about to go down. Sure we had a parabolic spike from 20$ to 147$ in 10 years. But I guess oil at 75$ (in the worst scenario) next year doesn't qualify it as a bubble.
Infact, I have been studying some long term and historic charts of oil. I believe there is another inning to unfold in oil.
Also curious which side are you on deflation vs. hyperinflation?
--clarke
Snot,
A comment on LDK chart for the old time sake? We miss you there and would love to hear your analysis.
We look to be headed straight for a deflationary period. I cant see how real estate values are supposed to hold up. So I cant see how they could be a good investment.
Can you say Manic-Depressive market?
Snot,
Please COMMENT more in relates to Real Estates especially Los Angeles ara.
Can anyone explain these two charts?
http://stockcharts.com/h-sc/ui?s=UYG&p=D&st=2008-06-23&en=2008-09-03&id=p42721225425
http://stockcharts.com/h-sc/ui?s=SKF&p=D&st=2008-06-23&en=2008-09-03&id=p42721225425
On the left and the right side of the UYG, the price is pretty close to 22.50. But when you look at the SKF chart, on the left its at 140 but on the right its at 110. This is a 25% discrepancy that I cannot explain. Why is SKF coming down so much? Is that much profit being consumed by overhead?
What do you think of this Snot? Is AGU going to single digits? If so, why is there insider buying?
http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=MOS%3AUS&sid=aBDV_Jstwp1Q
Snot, not to be picky, but when you write a comment of substance like you did on the 9th, it would be great if you could enter it as a headline post as opposed to a comment that's buried in with the others. Although I enjoy others comments, I really follow this blog for your insight and it is easier to track your posts here and in a newsreader like Google Reader when they are regular headline posts. Thanks.
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