Don't Trade on Hope
By Rev Shark
RealMoney.com Contributor
1/6/2009 8:42 AM EST
The reason people find it so hard to be happy is that they always see the past better than it was, the present worse than it is, and the future less resolved than it will be.
-- Marcel Pagnol
Over the past five days or so, market players have enjoyed a classic seasonal bounce. The last few days of the year and the first two days of the new year is typically the period when a "Santa Claus Rally" is supposed to occur, and that is exactly what we had.
But does such action really give us good reason to be happier and more optimistic about what is to come? Market players can be highly emotional, and they will be inclined to believe that a few days of seasonal strength mean that there really has been a significant change in market character. While that is possible, it isn't something we want to embrace too readily.
I don't want to sound overly pessimistic, because there really is some improvement in the charts of the major indices. The Nasdaq has some good support starting at 1600 and the S&P 500 starting at 915 or so. We can easily pull back some at this point, and we will still have some very promising potential to the upside.
In the shorter term, we are extended, and further upside is going to be a bit more difficult. Market players have been quite aggressive in chasing some of the moves in energy and commodities in particular, and it is quite tough to find entry points. For example, the PowerShares DB Crude Oil Double Long (DXO) ETN has doubled over the past week or so and is now running into overhead at its 50-day simple moving average. That is a tough buy at this point if you are looking for a chart setup rather than just pure momentum.
My feeling is that the mood is a little too happy here, as the seasonal strength is being regarded as something more meaningful than what it is. I'm also seeing a slew of downgrades from analysts today who are obviously using this bounce to change some ratings. There is a lot of optimism about 2009 being better than 2008, and who can blame anyone for feeling that way?
If we continue to go straight up from here, I'm not going to be participating much, because I'm seeing a bunch of extended charts. I'm looking for consolidation and pullbacks at this point, but I'm optimistic that the pattern in the indices will hold and give us a good base for some better action as the month progresses.
We have our work cut out for us. Good luck and go get 'em.
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Ülespoole avanevad:
In reaction to strong earnings/guidance: MCRL +1.7% (light volume)... M&A news: IDEV +75.8% (Endo Pharmaceuticals to acquire Indevus for $4.50/share and up to an additional $3.00/share based on achievement of certain regulatory and sales milestones)... Select oil/gas related names trading higher with strength in crude: PBR +3.5%, CHK +3.3%, MRO +2.2%, RIG +2.0%, SLB +1.8%... Select drybulk shippers trading higher: EXM +5.8%, GNK +5.0%, TBSI +3.2%, DRYS +2.9%, FRO +2.8%... Select financials showing modest strength: MS +2.4%, C +2.0%, WFC +1.9%, JPM +1.7%, BAC +1.2%, GS +1.2%... Select metals/mining names trading higher despite lower spot prices and strength in dollar: RTP +6.0%, RIO +4.3%, MT +3.5%, BHP +3.2%, GOLD +2.2%... Other news: OREX +19.7% (still checking), ACAS +15.4% (continued strength from yesterday's 30%+jump), ALVR +6.8% (signed a contract with VMAX Telecom to deploy Mobile WiMAX in Taiwan), TSN +4.1% (still checking), DOW +3.1% (confirms commitment to transformational corporate strategy), AMGN +2.3% and SNY +1.6% (still checking)... Analyst comments: YRCW +11.6% (upgraded to Mkt Perform from Underperform at Wachovia), XTO +3.0% (upgraded to Buy at Keybanc), AAPL +1.6% (upgraded to Outperform at Oppenheimer), GOOG +1.4% (upgraded to Neutral at Merriman).
Allapoole avanevad:
In reaction to disappointing earnings/guidance: LDK -11.7%, IMN -8.4% (light volume), VIGN -7.1%, LH -4.5%, ELX -3.0%... M&A news: ENDP -7.5% (to acquire Indevus for $4.50/share and up to an additional $3.00/share based on achievement of certain regulatory and sales milestones; also downgraded to Average at Caris and downgraded to Neutral at Cowen)... Select solar stocks showing weakness following LDK guidance: SOL -3.3%, JASO -2.9%, SPWRA -2.1%, YGE -2.1%, STP -2.1%... Select European financials trading lower: LYG -10.5%, RBS -6.9%, CS -3.1%, DB -1.8%, UBS -1.7%... Select gold related names showing modest weakness with lower spot prices: GLD -1.8%, HMY -1.6%, AUY -1.5%... Other news: IDXX -7.3% (still checking), LOGI -5.3% (withdraws FY09 targets, plans restructuring), MRCY -2.5% (discloses it has entered into a settlement with UBS), CCI -1.6% (reports that four of its executive officers forfeit restricted stock)... Analyst comments: GRMN -7.5% (downgraded to Sell at Goldman - DJ), CVH -4.9% (downgraded to Sell from Hold at Deutsche Securities), ATHN -4.0% (downgraded to Market Perform at Leerink), JASO -3.1% (downgraded to Hold at Collins Stewart), ICE -2.7% (downgraded to Neutral at Goldman - DJ; downgraded to Neutral from Buy at UBS), CB -2.1% ((downgraded to Underperform from Outperform at Bernstein), CI -2.0% (downgraded to Mkt Perform from Outperform at Bernstein), CERN -1.4% (downgraded to Market Perform at Leerink).
Vastav intervjuu Faberiga ka Bloomberg.com alla ilmunud ja saab seda kuulata siit.
Kes usuvad võlakirjaturu mulli, siis mõne aja eest avasime Pro all idee võlakirjade hinnalangusele panustamiseks. UltraShort Lehman 20+ Year Treasury (TBT) on indeksaktsia, mille liikumine on kahekordse võimendusega vastupidine Lehman Brothers 20+ Year US Treasury indeksile (TLT). Teisisõnu - kui võlakirjade hinnad langevad, siis TLT langeb ning TBT tõuseb kaks korda sama palju.
November Factory Orders -4.6 vs -2.3% consensus, prior revised to -6.0% from -5.1%
December ISM Services 40.6 vs 36.5 consensus, prior 37.3
December ISM Services 40.6 vs 36.5 consensus, prior 37.3
Short into close tunduks? või on kõigil poogen ja turg arvab, et teeme bounce kiiremini ära.
Fed says unemployment to rise 'significantly' into 2010
Fed says unemployment to rise 'significantly' into 2010
Kas siit väike pullilõks või ootas turg tõesti hullemat? Esialgu liigutakse üsna optimistlikult ülespoole:D
Kuigi liiga agaralt shortijad võivad välja pigistatud saada, siis olen täna abesiki short into close'iga nõus...
SRS on üsna huvitav, $50 tasemel võiks võtta näpuotsaga aga vist hilja juba.
Nüüd küll enam ei julgeks
German billionaire kills himself
Adolf Merckle
Mr Merckle had lost heavily on Volkswagen shares in 2008
German billionaire Adolf Merckle has committed suicide after his business empire ran into trouble in the global economic slowdown.
In a statement his family said he had been "broken" by the financial crisis, and had taken his own life.
Mr Merckle ran up losses of about 400m euros (£363m;$535m) last year due to wrong-way bets on Volkswagen shares.
He was ranked as the world's 94th richest person in 2008, and his family controls a number of German companies.
The 74-year-old's body was found on Monday near railway tracks in southern Germany. Officials said there was no evidence that anyone else was to blame.
vot kurat.
Sai veidi rahmeldatud jah, sees $49.90, väljuma oleks pidanud $50.60-50.70 aga ei õnnestunud.
Näedsasiis, mine veel Porsche vastu suurelt shortima
Ja meie (eesti) mees teeks sama peale 2millise valge mersu (600) shortimist Porsche vastu.
Alcoa cutib tööjõudu ja outputti
13500 ja 18%
tape on bullish aga data seda kuidagi ei toeta, kauaks veel seda jätkub...
13500 ja 18%
tape on bullish aga data seda kuidagi ei toeta, kauaks veel seda jätkub...
Lyondell Chemical Co., the U.S. arm of chemical giant LyondellBasell Industries, filed for Chapter 11 bankruptcy protection Tuesday.
The company, which sought bankruptcy protection along with 79 affiliates, listed assets of $27.1 billion and liabilities of $19.3 billion in its Chapter 11 petition filed with the U.S. Bankruptcy Court in Manhattan.
The company, which sought bankruptcy protection along with 79 affiliates, listed assets of $27.1 billion and liabilities of $19.3 billion in its Chapter 11 petition filed with the U.S. Bankruptcy Court in Manhattan.
Weak Data:
The good news is that the ISM services index for December came in at 40.6. That is still very low for an ISM index, particularly for services. It was, however, above the expected 36 to 37 range.
The bad news is that November factory orders plunged 4.6%. This was much worse than an expected 2.5% decline. Nondurable orders were very weak, dropping 7.4%. Durable goods orders were down 1.5%, which was revised downward from the advance reports of -1.0%. The real surprise was in the nondurables weakness. Businesses are cutting back on orders across the board.
Further weak data was evident in the 4.0% drop in November pending home sales. This was even worse than an expected 1% or so decline.
These data are not good news from an economic standpoint.
The market has been handling bad economic news relatively well recently, on the belief that these are old data relative to future prospects based on a government stimulus package. In this view, the current trends have less relevance than under normal conditions.
The good news is that the ISM services index for December came in at 40.6. That is still very low for an ISM index, particularly for services. It was, however, above the expected 36 to 37 range.
The bad news is that November factory orders plunged 4.6%. This was much worse than an expected 2.5% decline. Nondurable orders were very weak, dropping 7.4%. Durable goods orders were down 1.5%, which was revised downward from the advance reports of -1.0%. The real surprise was in the nondurables weakness. Businesses are cutting back on orders across the board.
Further weak data was evident in the 4.0% drop in November pending home sales. This was even worse than an expected 1% or so decline.
These data are not good news from an economic standpoint.
The market has been handling bad economic news relatively well recently, on the belief that these are old data relative to future prospects based on a government stimulus package. In this view, the current trends have less relevance than under normal conditions.