Click chart to enlarge Ever since they made a decisive and simultaneous break of both their trend channel and moving averages on July 17th, oil prices have been locked in a Stage 4 decline with no end in sight. Today, Merrill Lynch came out with a $25 oil prediction, an additional 40% drop from its current price of $43 per barrel.
On Oct 2, Merrill cut their oil forecast from $107 to $90
On Nov 26, Merrill cut their oil forecast from $90 to $50
So, why, then, didn't they just call for $25 oil on October 2nd? Or on July 17th for that matter?
We called for commodities to reach 14 cents, because we figured it's as good a guess as anyone else's. The CEO of Gulf oil, Joe Petrowski, says that oil could fall so low that it costs just $1 per gallon at the pumps. We're with him in that we're not willing to choose an artifical bottom on a downtrending chart. The bottom is always $0.
Merrill Lynch should have known this on July 17th, rather than change their forecast on a monthly basis based on momentum under the guise of advanced fundamental analysis.
Of course, it's a whole lot easier to sell investment advice based on sound fundamental analysis, particularly if the jargon used is not understood by the masses.
There is no fundamental analysis required to tell you that an object in motion stays in motion until bankruptcy, or an equal and opposite force (decisive and simultaneous break of downtrending channel and moving average) turns it around. We're not going to turn bullish on oil until this happens. Until then, we continue to predict that all commodities reach 14 cents per share.
95 comments:
If ever there were a chart that looks like it's about to break down, it's AGU.
At around $30 in mid Nov, we mentioned that one of Gary's longs (LPHI) had returned to its moving average. The market plunged for the next several days, bringing the stock to $25, but the stock was still in an uptrend, and promptly sprung up to $36.
Now we have another of his picks, AFAM, which has returned to its moving average. We wouldn't touch a low volume stock like this with a 10 foot pole, but for the less risk averse out there, we figured we'd bring it to your attention.
AFAM is sitting on a weak support, but there are two more support lines at lower prices. There is no convergence of support lines at $41, as there was with LPHI @ $25. I would set a target price of 36.50. I am seeing a convergence at around that price, so there is a very strong likelihood that it will bounce off that price. Maybe even a little higher than that, if you look at the channel that is formed from the various intraday lows over the past few months. (Ignoring that one blip in early october.) How about $36.76? I'll put in a small buy order at that price, just to put my money where my mouth is.
some comments on oil:
TER: Do you have any statistics on automotive consumption of oil-based products compared to other usage? If it’s 50% or 60%, that’s one thing, but if it is 25%, demand destruction from less driving shouldn’t have much impact. In other words, what does the price at the gas pump really mean in terms of consumption?
ML: I believe gasoline represents about 50%. That’s from a North American perspective in terms of what refiners are set up to produce. It’s basically a gasoline refining producing system here, which is not necessarily the case elsewhere in the world. What we saw last year and into this year is the “dieselization” of the vehicle fleet in Europe and also strong diesel demand for power generation in South America and, most importantly, in China.
So, demand destruction is very North American-oriented for the gasoline part of the story. But when you look at the data, you see that diesel exports were rising for U.S. refiners because that’s where the strong margin was. Diesel demand, the distillate demand, underpinned strong crude oil prices in the first half of the year. That’s what the refiners were chasing for positive margins, not gasoline. So that was different than the prior year, when it was gasoline-driven. This year it’s been a diesel story, but now we see the European economies going into recession and Chinese diesel demand appears to be softening. That was the one pillar that was supporting strong oil prices; when that started to shake, crude oil prices came down.
TER: Other than the OPEC meeting and reducing production, what else are you looking for to signal that the price of oil is at the bottom and will start to turn?
ML: That’s a great question. The lowest breakeven price I’ve seen from anybody in the world, whether it’s accurate or not, is $30 a barrel. Eventually, a time may come when oil can’t go any lower because nobody can afford to produce it. That would be the ultimate low, but I’m reading that only Saudi Arabia can produce at those levels. Nobody else can. We’re talking about oil sands projects as being a very big piece of the incremental supply picture in the medium term on a global basis, but $80 to $100 oil is required on those projects.
http://www.commodityonline.com/news/Lowest-breakeven-price-of-Oil-is-%2430-a-barrel-13153-3-1.html
888888s
Quoting Mark Leggett: "Eventually, a time may come when oil can’t go any lower because nobody can afford to produce it."
That is the flaw in thinking that leads so many people to believe oil "can't" go lower than a certain price. Indeed it can! It's called deflation. If we enter a deflationary contraction, the production cost of oil could easily fall to below $10 a barrel. I agree with Mish, it would be a very healthy thing for the economy in the long run.
With today's wrenching unemployment numbers, I bet there are all sorts of people speculating that this may be "the bottom", and are thinking about buying. All I know is that at one point today, financials were up even though the major indices were down 2%. What kind of nonsense is that? BGZ is returning twice as much as FAZ. And FXI is still creeping up, totally oblivious to what's going on in the US. (As if they are going to make money even though their principal customers are losing their jobs left and right!) Given the odd behavior of XLF/UYG and FXI/HSI, one can only wonder exactly how much of that bailout money ended up in Hong Kong!?!? Seriosuly! I bet its a hell of a lot more than the $34 billion the Big 3 are asking for.
Something else I heard or read, this thing about the price of oil, OPEC was never in control the only reason THEY let the price get up was so that the Arab nations could buy western debt and now the plan is to collapse the price of oil and instigate more tension in countries like Venezuela and Iran ....
Something to think about
I bought some pot's shares and add some shares for uso.
I think dow will be green at 4:00pm.
GLD is back at support. Now is a good time to pick up some DGP, imo.
Small Boy! Seem likes you have a lots of dry power to average down the down trend sectors, AG, oil and gas! Do you know POT broke the last major support $50.
Just sold the DTO, bought some DXO with tight stop. :)
It's hopeless...
I wouldn't fret too much there seeer, this guarantees more than a token cut in production from OPEC at their next meeting. I think Snot is right- the world is punishing OPEC while it has the chance.
But payback is a bitch and when they have the chance they're going get their revenge. You watch, as the price rises over the next few years they will not increase production one drop and they will relish watching us pay through the nose.
And you're right Snot, GS is full of a bunch of jagoffs. They were calling for $250 a barrel oil on it's run up, and not 12 months later they're calling for 1/10th the price. How could anyone take them seriously? They don't know any more than we do, oilwise.
Too bad they don't have inside info on that too, maybe they'd do a little better.
Anon: According to your manner and skills, I think you are a child.
You even don't know what is support, then blame other one.
Frankly, I know who you are! why are you so angry?
Icon, did you take a loss on FAZ or are you sitting on a 10 pt loss right now?
Every time I get tempted that things goes down more than I thought possible and I keep getting scared off.
I cleared out most of my FAZ yesterday. As a rule, I wont short financials when they are on the verge of generating multiple buy signals. I tried to highlight that fact yesterday. The creation of a new rsi support line is a very bullish signal. Combine that with the break of an rsi resistance line, and you have the recipe for a huge rally. If it werent for my knowledge of these horrible economic numbers, I'd have bought FAS in anticipation of such a rally. Once again, this is an example of how knowledge of bad data adversely affects trading decisions.
All in all, I am encouraged by today's action. SRS and SKF are down to levels that signal a top. We really needed a financial rally to get that, because SPX has been floating around its resistance line for quite some time, as if it has been "waiting" for SKF and SRS to get into position! SPX resistance is currently down to about 878. I hope we close right on it. All of this coincides with that "big event" I've been anticipating next week. Right now is a great short entry position. Even FXI is very close to its uptrending resistance line. This is the perfect opportunity for a big payday for shorts. The risk/reward is very low. If we rally next week, sell your shorts, I'll take my losses at about 10%, then wait for the 200 sma. That is my plan.
Iconoclast421: I think the trendline has broken. It's a good sign for the bulls, but not enough. There are a lot of resistances everywhere, 30EMA, 900, 50SMA, 1000,
GS and oil prices: please read the Stan Weinstein book... :)
Nothing has broken yet. We are at the same exact spot we were last week. At a lower point along a downtrending resistance line. And at the top of a channel. We are right on the 12 month long upper resistance line on the weekly chart. Right smack dab on it! If we close higher next Friday, we finally break a very significant trend. Then we get a rally that knocks everyone's socks off. Until then, we're still heading for zero. I am predicting that next week will break most people's optimism. They will finally be completely sick of hearing how this "could be" the bottom. Then we get capitulation. And ironically, we get a real bottom. (Till spring anyway)
Are you talking about the indices or the oil? I talking about the DJIA and the SP500.
http://img49.imageshack.us/img49/7278/spxrn0.jpg
This trendline has broken.
I dont think that trend means anything. It's too short. Here's a chart that shows two possible trend channels, one of which I think we are on, long term.
http://i468.photobucket.com/albums/rr44/iconoclast421/SPX.jpg
I think we are in the less-steep channel. But we wont know for a few more months.
As for this current trend break... It is the top line on the rsi that is setting the trend, and that is what needs to be broken. It is even more obvious on the weekly chart, where that same line runs for over a year connecting the uppermost peaks in the rsi. On the weekly chart, we got a short term break in that line in late april, signalling a bear market rally. (Which then broke down a few weeks later.) If we do get another true bear rally, look to the technical breakdown of last May for signs of what to expect now. The technical analysis used in the above chart will easily spot the breakdown of any rally. It is incredibly accurate for calling tops of rallies. In that respect, I do hope we get a real rally, because knowing the top will be a source of big bucks!
I agree with Icon- nothing has broken yet. Patience will reward.
Iconoclast421: these trendlines which you paint on to that chart are meaningless in my eyes, what do you think, how many traders watches these trendlines? I think you overelaborate this thing.
But no problem, everybody walking his own way in trading. :)
Well, each time SPX has reached that upper rsi resistance trendline, it has fallen hard. Now here we are again, sitting on that same line once again. I think we're going to fall hard once again. It may appear meaningless, and people may not trade off them, but then again most traders are idiots who've lost money pouring over the MACD and stochastics and a bunch of other stuff with nothing to show for it. So what does that say about them? I think the computer trading algorithms, in the aggregate, are what form these peaks and valleys that so conveniently line up. I think they speak volumes. I guess we'll see what happens on monday...
They "play" with the MACD and stochastics, you with the RSI... What's the difference? :)
I am using the moving averages, supports, resistances and trendlines. The other bunch of indicators are cons.
Icono, I appreciate your posts here. Is your method from someone else or you developed your self. Why don't you chart the price directly. What is the reasoning behind the trend lines on the rsi?
Snot, On Nov. 6th in “This Week” on Nov. 3rd you wrote, “Oil's selloff is definitely getting overdone. It's hard to believe it could go much lower, although there's nothing bullish whatsoever about that chart.”
And “Don't get us wrong, OIL is a safe bet long term. There's no way we're relieving ourselves from our dependance on oil for many, many years to come. Buying OIL is like buying the indexes, unlike stocks, they have a floor.
When you posted your comment about DXO, we immediately went to the chart to see where it was because we didn't think oil could go much lower. No doubt it's oversold now, but like the indexes, who knows where the bottom will be.
We would feel completely safe buying oil here, knowing that at the very least if our timing was way off and it went much lower, we would be able to break even on it at some point in the future. That's the worst case scenario for oil. Any other outcome is good for your portfolio, so it's a no brainer if you have patience.”
On Nov. 11 in “US Automakers” from Nov. 11 you wrote, “Regarding oil...
"Demand is poor and should get worse as the recession deepens."
http://www.bloomberg.com/apps/news?pid=20601087&sid=aiiNR7Xs6Osc&refer=home”
On November 12th from “For the Record” you wrote, “Agree that oil is a good long term bet, but it's still a downtrending chart. Really no different than buying DDM or SSO!”
Do you moonlight for GS? :)
Yeah, oil keeps going lower. At least oil company stocks seemed to disconnect from it some today as they participated in the rally. DIG up 5%. OIH up 2%. CVX up almost 4%. VLO the refiner up almost 5%. MRO, which Cramer has been pumping, up over 3%.
Here is an "expert" saying the market has overshot by going too low.
http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=4e15032a-9690-4690-ab50-9188eb73ee6b
Canada may cut production if oil drops much more.
http://www.financialpost.com/trading_desk/energy/story.html?id=1033887
Weren't some of the experts talking about $200 oil when it went above $140?
I think the smartest statement comes from another poster on this blog who said, "Nobody knows."
Anon, what was your point in your tedius recapping of comments we already knew Snot made over the last month or so? To prove that he's been right all along?
Thanks, we already knew that.
Oil and OPEC
http://biz.yahoo.com/ap/081206/af_algeria_opec.html
oil and opec-
so the surprise is no longer a surprise. off with that guy's head.
88888888s
Anon, what was your point in your tedius recapping of comments we already knew Snot made over the last month or so? To prove that he's been right all along?
Hmmmm? You must not have read them very carefully.
bigboy8882008 said:
"I just sold dug and bought dig"
Time: December 5, 2008 9:34 AM
Anon said:
"DIG is going break down decending triangle. This is dead wish for you Small Boy!"
time: December 5, 2008 10:31 AM
----------------------------------
bigboy8882008 said:
"I bought some pot's shares and add some shares for uso.
I think dow will be green at 4:00pm."
December 5, 2008 1:11 PM
Anon. said:
"Small Boy! Seem likes you have a lots of dry power to average down the down trend sectors, AG, oil and gas! Do you know POT broke the last major support $50."
bigboy8882008 said
"Anon: According to your manner and skills, I think you are a child.
You even don't know what is support, then blame other one.
Frankly, I know who you are! why are you so angry?"
-------------------------------
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_U/threadview?m=tm&bn=51316&tid=70987&mid=70987&tof=1&frt=2
http://biz.yahoo.com/ap/081206/af_algeria_opec.html
not bad !
I think if oil get a bounce it can go to 60 USD, but this is the maximum, 50 is reasonable. After that it will fall again. But I'm not good at prediction, additionally it doesn't make any sense.
I just trade what I see.
since everyone has been talking about oil, i haven't seen anyone talk about gold...
With the US keep printing money at the fastest pace, don't you think this will cause hyperinflation and this will make Gold skyrocket and so purchasing DGP or GLD a wise investment for longer term?
any opinion?
thebat
To the oil recapping Anon,
You're obviously the one who didn't read Snot's posts carefully.
Snot's been saying for over a month now that oil is a crappy chart and that it will continue to deteriorate. When he started saying this oil was at approximately $55 a barrel. Now oil is at $40 a barrel.
He said it would go lower and it went lower.
So again I ask you, what was your point in tediously recapping comments we've all already read? I bet your nickname is Cliff Clavin!
Technically the gold is in downtrend, but the decline of the price compared to other precious metals/commodities is much slower. It's not a good short opportunity because the gold is a strong fugitive instrument (or something like that) just like the US Dollar, the Japanese Yen and the bonds.
When "everybody" were saying "oil to 200", that was the time to sell oil. Now that the same "everybody" are saying "oil to 25", I think it is time to buy. I got a bit of DBC January 22 call by accident, it was meant to be a GTC order that was so ridiculously low that would never be hit, but it did hit on Friday.
AP Interview: OPEC head predicts output cuts By ALFRED de MONTESQUIOU, AP
December 7, 2008 3:28AM EST
ALGIERS, Algeria -Oil markets should brace for a surprise decision on output cuts when OPEC meets Dec. 17, the cartel's president said Saturday, suggesting that reductions could be deeper than expected.
"A consensus has formed for a significant reduction of production levels" by the 14-member Organization of Petroleum Exporting Countries, OPEC President Chakib Khelil told The Associated Press.
The OPEC head would not discuss how deep the output cut would be, but said it could be "severe," and noted that some analysts are predicting cuts of as much as 2 million barrels per day.
An output decision that startles markets would help bolster plunging oil rates, Khelil said.
"The best way is to surprise them," he said.
If you're long oil you're loving this. 3 million barrels a day should have the desired effect.
Something you guys may have missed. Here is a good article on VIX.
http://vixandmore.blogspot.com/2008/12/double-tops-in-vix.html
Read it and tell me what you think. Market bottom?
j
Interesting article on VIX, but too soon so say, in my opinion. The chart of VIX from 2000 to 2003 might read more like 4 or 5 spikes.
http://finance.yahoo.com/echarts?s=^VIX#chart3:symbol=^vix;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
The recent spikes of VIX are so radical that they are almost off-scale compared to anything else on the charts in the last two decades. Too many experts are saying that we are in new territory here where predictions are even more uncertain than they normally are. Instead of declaring a new trend or calling a bottom, it is better to hedge yourself and be prepared to shift your allotments to adjust for the unexpected.
Ben
Sunday night oil is up nicely. Most ag futures are up. Some metals are up. DOW, Nasdaq and S&P futures are up. Monday may be a good day for commodities and commodity related stocks. Go DIG go! I don't have USO or OIL or DXO that several on here talk about, but I do have DIG.
Ben
Asia is up big Monday. FXP and EEV will gap down big at the open. Time to buy some or are their charts headed to zero, Snot?
Looks like SSEC broke resistance and closed at (As it is a good indicator of what the markets will do) - 2,090.77 - where Daily MA is 1948.77)
The rally that Snot has been waiting for might finally come true. (SPX at 1200)
FED slashing interest .50 to .75 points and focusing on quantitative easing might be next.
Snot:
I followed you to buy SMN at $100.23 last Friday. I lost $25 per share now, how can I do it? please tell me. Thanks.
Your own fault Anon. You bought SMN in the first hour at the high and then sat there and watched it go lower for the next 5 hours and did nothing? 100% your own fault. Learn to use stops.
Are you Snot? Why do you use many different IDs on this blog ?
You are still holding SMN tight, why do I have to use stops?
Anon,
Snot purchased SMN as a hedge toward its long postion. Its called Risk managment.
You have to take responisbility of your own actions.
Iconoclast,
Whats your take on today's rally.
I see it have some long legs.
I bought some FAS at the open 9.30.
FXP down to $36. Wow. I tried to short it when it was $140 but no shares available from my broker or not allowed for some other reason. Groan. That would have been great.
DRYS is flying. Wish I had more of it than a puny position bought at $3.91.
20-20 hindsight as always.
Signed,
Anonymous
P.S. - The last couple of posters are right. Snot has been buying shorts as a hedge, holding a mere 3% or 5% of them in his portfolio. He only goes in heavy with a short if the market rallies to the top of the channel and he thinks it will bounce downward off resistance.
Today's rally breaks that very long rsi resistance line I've been ranting about for weeks. Additionally, FXI is currently breaking an uptrending rsi resistance line, which is the most bullish indicator I know.
We could be entering another one of those periods of "irrational exuberance"! (Paid for by bailout money sent to Hong Kong.) It is hard to believe, but then again DOW 14000 was hard to believe. It is oddly comforting to see total madness returning to the market. It's been a while...
With the markets up 3.8%, SPX is sitting on the next higher point of resistance. That means if we close here, it's a new test and thus cannot confirm any signals for SPX. However, FXI will signal a buy if it closes over 30 today. If that happens I would start thinking about the 200 sma. FXI @ 40 seems like a very good possibility. I just wont believe it till I see it! I would rather wait this madness out, because when FXI is at 40 I will be much more certain where the market is going.
Financials are coupled to this asia-bailout scandal. So if you're into risk, I think a great play would be long FAS until FXI is near 40. But no matter how tempting it is, I will not go long this week.
icon, you said you are not going to go long this week? does it mean you are going to sit on the sideline without going short?
Why would someone be buying here and a year-end selling-spree is around the corner?!!!
I think GE had quite a run lately.
Could GE Capital be trouble to GE?
A closer look at GE Capital
By Gretchen Morgenson
Published: December 7, 2008
unit that has generated more than half the company's profits in recent years.
Investors looking for more transparency about financial stresses facing their companies are fearful of troubles lurking inside the black box that is GE Capital.....
http://www.iht.com/articles/2008/12/07/business/morg08.php
LeBlanc
Snot, help me! I lost 30% for SMN in two days.
You said:" Until then, we continue to predict that all commodities reach 14 cents per share." I thought" if all commodities reach 14 cents per share, SMN will reach $1000000 per share, I will become a billionaire" at that time, that's why I bought SMN last Friday, however, We made dead mistake right now.
please help me! please !
Dear Anonymous who lost 30%,
You aren't IBCNU trying to be funny are you?
Snot, I followed you and could not make any money in this bullish market. too sad !
This may finally be the rally that takes us back to the averages. A quick glance at FXI shows that this time may be for real. Did anyone catch the Asian hedge fund manager on CNBC today? His fund is up 97% YTD, and he predicted a rally of 8 to 10% from these levels (to approx Dow 9500), then another selloff. We're looking for the rally to extend to 10,000 or so. If we break his target (November's highs), we should be able to get back to 10k.
We're down on SMN and QID, of course. But we're just going to hold them as the market rallies because we have about 5 times as much capital in longs as in short positions. If we do get back to 9500/10000, then we'll let go of the longs and add to those short positions. If you just bought SMN and hold no longs, then you're up a creek. We still think oil goes lower. One day does not make a trend.
Check out AFAM today. Congrats to those who had the courage to step in on Friday.
Notice we closed right at the 3.8% mark. We're at yet another key inflection point, a convergence of uptrending rsi resistance lines:
http://i468.photobucket.com/albums/rr44/iconoclast421/spx-12-8.jpg
If we break out through them tomorrow we could have the biggest rally of the year, if not of all time.
But I dont think we're going to break through that resistance tomorrow, because it is a convergence. We almost always bounce off of those. So I'm back to being short. I've indicated in red where I think the rsi is heading over the next 3 days. Again, the best thing to do is wait. That is what I should be doing, since I havent created any rule that says the rsi must bounce off a convergence. But I'm bearish this week for nontechnical (ie, stuperstitious) reasons. The chart doesnt support a short or a long position at this time.
I really don’t want to post my background before, but one Anon. humiliated me, called me “small boy” last week, so I post my reputation as follows:
1. I made 19.5 times(including option) within 6 months in last year.
2. I have made 128% (including option)since Dow hit 7500.
3. I was a teacher and taught my students to trade stocks in Asian community.( I quitted the job in Feb. because I predicted the stock market would crashed in this year, and many begainers bought long and held it, they couldn't short the stocks whatever I taught them )
4. One of the ceo’s who run his business on Wall St. invited me to recommend stocks for their website. I didn’t accept it for some reasons.
5. Please check all my Msgs. on this Blog.
Btw I will leave this blog in near term because someone's manner was no good and someone was jealous of me !
Thanks for your bio. BigBoy.
Snot,
Take a look at Shanghai comp. Indx(SSEC)
http://stockcharts.com/charts/gallery.html?$SSEC
bigboy,
There will always be someone bashing! Piece of advice: don't let it get to you! BTW, congrats on your success! I've lost a ton of money in LDK and now I'm becoming a smarter investor thanks to you guys!
icon,
Why do you usually go by SPX charts and not Nasdaq and DOW? What if Nas and DOW break resistance and SPX doesn't, could this be the case?
j
Hi Bigboy,
What are you buying now? Are you still keep your USO?
Good for you Bigboy. In this market, if you are up then you are doing good. Don't let other distract you. I do follow some of your pick and make some bucks. Thanks. Keep up the good work! Please post here what is your next buy or short. People always do their DUE D. before buying. Your information is helpful!
I go by the S&P because I think I'm seeing "artifacts" that result from the massive amounts of computer trading algorithms that are mostly based on the S&P. Most of the time it doesnt matter though. I'm seeing the same convergence on the DOW. The Nasdaq has it too.
One thing that is different is that the DOW is already at its 50 sma. (Probably because it crashed harder in early october) That only increases the likelihood of a down day tomorrow. Based on this I think it is enough to sway me from neutral to short tomorrow. Maybe SPX will rally to its 50 sma, then drop off.
As for the infamous anonymous bashers, you're always going to have those. No point in giving them a 2nd thought.
Icon Smasher,
Two trivial questions if you care to answer:
1. Why the handle iconoclast? What beliefs or otherwise do you feel called to destroy?
2. What do you mean by your frequent reference to the occult on your blog?
The iconoclastic controversy is an amazing period of history. The theological arguments on both sides were incredible.
Isn't the S&P more diverse in its holdings than the Nasdaq?
Signed,
Anonymous
To the many Anon's on here and one in particular,
Let's please try to keep the posts here to stocks, okay? This isn't a theological blog. This isn't a blog to post your bio. I for one certainly don't want to hear anyone spouting their theological B.S. on here. I'm interested in the stock market. Period. Probably as most people who come here are. If you have theological questions to ask Icon then why didn't you ask him on his OWN blog that you're obviously aware of BECAUSE YOU REFERENCED IT IN YOUR QUESTION?!?!? Why would you come to an entirely different blog to ask questions of a person about THEIR blog?!?!? Are you Icon's own personal stalker? Do you follow Icon to other boards too? If so please waste their time, not ours.
Thank you.
Suomynona, did it ever occur to you that my questions to Icon Smasher had NOTHING to do with theology? Icon is dishing out tons of advice and recommendations ON THIS BLOG. What is his philosophy that is behind it? What icons (that means some settled or accepted belief or institution; in this context some economic theory or stock trading theory) is he operating from? And the references to the occult seem to be in the same context as they are related to his beliefs about what is going on in the world of finance as far as plots by Paulson and hedge fund operators, etc. are all concerned. So for a person to evaluate properly the advice Icon is dishing out in huge, generous portions ON THIS BLOG, knowing those answers would be helpful. My mistake was in calling them trivial when I don't know that to be a fact. Thank you.
To Iconoclast 421, in light of the above rants, what did you mean by, "But I'm bearish this week for nontechnical (ie, stuperstitious) reasons."
I am still holding DIG, POT, and USO.
Right now Wall St. controls oil price and buy oil stocks, that's why OIH and DIG are up lot and USO is red, finally Wall St. will pump oil price (USO DXO OIL) when they want to sell oil stocks.
imho.
As I said:" I will play oil sector before OPEC meeting"
hi bigboy, i am playing cx, one of your picks. it should be good into the new year with all the road and bridge work. i don't understand why these mbs always turn into a pissing contest.
what do you think about the stock market in general with all the failing companies?
personally, i am holding skf,srs,gold stocks and fxp. my few longs are stocks are financials(us gov has vowed to save them, but i believe they will eventually fail, so i have skf) and infrastructure stocks like cx, and some solar. big pharma should do very well as they are anticipating the universal health care obama is promoting, but i don't have a pick yet. thnx for your thoughts.
88888s
Bigboy, I'm doing well with DIG right now. I hope you are right on oil and oil stocks. CX is really taking off. I wish I had gotten in on that one earlier like 88888 and you did. 88888, have you considered RXL for pharmaceuticals? What do you think of it?
Ben
On the news the other night someone was reporting on recession proof industries. One of them was the funeral business, for obvious reasons. Anyone know of a way to invest in it and have an idea of the potential risk versus reward on such an investment?
We're not having a good day. Both our longs and our shorts are down. For much of recent history, the indexes were trading in tandem. Perhaps it's sector-specific buying going on.
Snot, would infrastructure buying (due to Obama) account for your bad day?
$86.75 is day low for dia, also the gap was filled
FSLR seems to be within its recent upward channel, but LDK broke down. Any thoughts for the solars? Needless to say that I am the bag-holder of LDK.
For big-boy, I know what 888 means :-)
Funny that you mention LDK. When Snot said he was having a bad day, I was going to say "It could be worse, you could be long LDK!!!1!!" yuck yuck...
Ugh. No one should have been long LDK today. LDK's chart has got to be the easiest to read of any that I have ever seen.
http://i468.photobucket.com/albums/rr44/iconoclast421/LDK-12-9.jpg
Yesterday, LDK failed a test of a downtrending rsi resistance line. That was a surefire sell signal. And today it closed at a perfectly predictable position. There is actually pretty good support at 11.69, and I think it should bounce pretty good tomorrow.
My prediction from yesterday (http://i468.photobucket.com/albums/rr44/iconoclast421/spx-12-8.jpg) for SPX was exactly correct, so I am sticking with the course indicated in red. That means a 3% gain tomorrow, 9% in BGU. I think LDK has a great chance at beating BGU tomorrow. I would go long but I need to have money available for when SPX hits 915/925. So I will remain on the sidelines with only my small short position from friday, and will double it when SPX reaches 915. And quadruple it if SPX reaches 925. I feel much more confident trading off the resistance line than off a support line that was already broken once (when SPX hit 750). Note that LDK also broke that same support line on that same day. So its safe to say that it wont do that again unless the whole market breaks down. If I was still long LDK, I would be adding a big chunk at 11.75. My chart also shows what my sell target for LDK would be: Right on that downtrending rsi resistance line.
Icon,
Thanks for the chart and analysis. I added a bit more LDK in afterhours at 11.75. I figure even if it wants to break down, it should go back to re-test the bottom of the recent rising channel, at about 13.5.
Yesterday I sold ldk for the following reasons:
1. one bad news.
2. it's up 60% from its' bottom
3. TA
I'm going to buy LDK at the open tomorrow, then wait for spx 915 to sell!
We shall see how it will work!
Thank icon!
j
Icon,
Over the last 6 months, STP, YGE, and many other solar names dropped more % than LDK. The longs for all solar companies are suffering. Why do you single out LDK as a bad long to have. Or were you just talking about the last 2 days? Are you seeing something that would make LDK specifically worst than other solar?
LDK hasnt fallen as hard as those others because its fundamentals are much stronger. If it weren't for the collapsing debt bubble, I would be extremely bullish on LDK. Even now with energy prices so low, they'll be able to produce TCS gas and wafers at prices and volumes that could corner the market. That puts them in an enviable position if re-flation ever occurs. They might even stockpile millions of tons for the Chinese government. If China plays their cards right, they could easily build a solar panel for every home in China. That will give them free power to run all the low-power consumer gadgetry they've been building for us. That in turn would create a market for all the stuff they sell/sold to us. Then we go the way of the dodo and they take over our role. That's what I predict if we go into a fullblown depression.
But if all this Fed inflationary action finally takes effect, we could see oil jump 500% in a matter of months. Solar stocks will soar at some multiple of that. But since we dont know where the long-term bottom is, it doesnt mean much. 500% times $4 is only $20...
Solar is just a play on oil so why would anyone spend their hard earned money purchasing shares of an individual Chinese company when you could pick one of the many oil based ETFs? I'd sleep much better at night owning one of those than some dubious Chinese solar stock.
I like solars because there seems to be a large ratio of smart money vs big dumb money (401ks, pensions etc) in solars. The smart money is trading according to computer algorithms that are easy to detect. That makes solars easy to trade. Look at LDK today. A nice quick and easy 5%, a gain that was practically guaranteed. Then it fell back to support and provided yet another opportunity to gain 5%. Smart traders were able to gain 10% on LDK this morning alone, with even more potential gains to be had in the afternoon. But now that we have 3X index trading available, it makes trading solar somewhat redundant. I'm getting the same results from BGU. But I see that lots of smart money is still in solars. As the market cap of solars decreases (the big dumb money is leaving), it only makes it easier...
Congratulations to everyone who is long oil or commodities. Be sure to take 1/3 of your profits and put a stop under another 1/3 at some point.
I just sold 1/4 shares for pot. if dow is up 100-150 points, I will sell another 1/4 for pot.
Dow is up 100 points and sold another 1/4. I made 42% in 4trading days. In fact pot is still very strong.
Hey Icon,
These clowns that follow you accross the web are very irritating arnt they? I had to lock comments form my seeking alpha articles because of one of those fools. Best course of action is dont respond and just wait for him to get bored...
http://finance.yahoo.com/news/Oil-prices-jump-on-rumor-of-apf-13799310.html
Saudi oil news.
Signed,
Anonymous
shrug. I havent noticed anyone "following" me. And I again encourage people to do their own DD. In the case of LDK, I noticed two other lines of resistance. And they just happened to converge at around 12.40. That's most likely why LDK didnt do too well today. Had I actually been looking to trade LDK, I would have been more thorough in my analysis. But any disciplined trader would have taken profits at 5% and ended the day in the green.
Unfortunately SPX came 7 points short of my target, and closed far below it. I am assuming the uptrend will continue tomorrow. We are sitting on a steep uptrending support line that is gaining about 1% per day. I am widening my target range on SPX to 916-931, because we are drifting further away from monday's convergence of 4 resistance lines. A down day tomorrow signals the first stage of a technical breakdown, and signals the end of this bear run. If monday ends up being the high, then this bear rally will have lasted 11 days with a gain of 22%. Not bad gains, but pitifully short duration.
Bought SMN today. Hope it was a good trade, but I guess we'll find out tomorrow! Got a 2% gain on LDK today. Pretty crappy... I know!
j
2% per day equals 10% per week equals 500% in a year, not counting compounding. Wouldn't we all love that?
Hey snott you need to look at the DRYS graph and let us know what you think? The shipping sector has been on a rip this week.
I did not trade LDK, holding what I bought during yesterday's afterhours. Just came home today and found it way down in afterhours, so I could not help adding a bit more at 11.6.
Why do you think LDK will be up tomorrow lightsource?
j
Hi Bigboy,
What are you thinking about POT? Does it still have some juice to run before the SELL OFF? Up $22 from low? What will you buy or short next? Market seems over bought now. Thanks
Hi Anonymous J,
It looks for me (a casual afterhours observer of market) that SPY is on the verge of breaking its 50 day moving average. It broke the 20-day moving average not by longs buying, but by longs holding it in a narrow trading range and waiting for the moving average to gracefully fall below the market. Once that happened, the hedge fund computers all say "bullish" and they all bought at the same time. I think the longs are playing the same "moving average waiting" game for the 50-day, dropping at half point a day for SPY. Tomorrow it will be 91.5. If the market can hold at current level, one of these days the market will be magically above the 50-day, at which point the hedge fund computers will collectively say "major bullish" and they might all buy at the same time.
I have no idea what future holds for LDK. I traded LDK near the end of last year and made lots of paper money that I had to pay lots of taxes for last year. The paper gains have all been given back to WS, and some more. I am hopeful that the same LDK will make some of the losses back.
I figure if the market cooperates, the Obama clean energy/infrastructure play, oversold revert to mean will all help LDK in the near future, may not be tomorrow.
Just some random thoughts. If I am wrong, I'll probably sell even at a loss (learned the buy and hold lesson before).
When snot says, buy SMN and oil to 14c, I had to buy some commodities and dxo. Well amply rewarded with 100% profits in two weeks. Cannot complain.
Keep posting.
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