Friday, June 18, 2010

Flatulent Friday: Are we toppy now?

Dow Jones 10,450.64 +16.47 +0.16%
NASDAQ 2,309.80 +2.64 +0.11%
S&P 500 1,117.51 +1.47 +0.13%

Between quad witching and the overwhelming emotional baggage of 1) BP's Gulf oil disaster, 2) Euro percolation, 3) renewed fears of US housing/jobs/financials fuck ups, 4) China inflation, 5) North Korean shitstinkery and more, the market simply seemed exhausted by today. What little buying there was surely was limited to a minority of issues like AAPL, which closed at an all-time high of 274.07 on 30 million shares traded — roughly 25% more volume than usual.

While there wasn't a whole lot of buying pressure, there was even less selling pressure. There are all kinds of reasons for this, but the main one is simple: With $27 billion outflowing from the market so far this year, it's all been reduced to trading desks, high-frequency trading machines and day traders. No blame to go around from this little tower. We wanted to eat the forbidden fruit of market capitalism, and the food chain developed instantly. Whether it's algorithms or the invention of the wheel, whoever capitalizes on new technology will usually win while the remaining masses howl with fever over disadvantage and conspiracy.

I could easily complain, but I'd rather just get a good night's sleep, wake up at a nice hour like 6 or 8 am Hawaii time, and observe. So I missed a chance to re-enter my beloved AAPL. So what. I'll get another chance sooner rather than later. AAPL run-ups are often met with ridiculously steep sell-offs, or simply continue running, especially after a few weeks of consolidation. It won't bother me to ride AAPL from 280 to 300 at all. If I can get in at 250 next week, better yet.

But this is the world we live in, when a single currency has markets fretting, and Earth's greatest tech retailer ever can be practically felled in one swoop (from 200 to 78 not so long ago) because of a housing/financial crisis.

For the record, the eight stocks I'm watching closely were mostly in the red today.

• AAPL 274.07 (+0.81%)
• SD 6.86 (+1.78%)

• CLNE 17.15 (-0.81%)
• CSTR 48.95 (-4.56%)
• GLDD 5.34 (-0.78%)
• TGP 30.03 (-0.07%)
• UNG 8.53 (-2.29%)
• WPRT 18.62 (-2%)

I'm still 100% cash, waiting for the market to settle down (which it has) and provide a clue about direction (which it hasn't).

AAPL was at 242 last week Wednesday. This feels like the consolidation months back when shares drifted between 195 and 215 before popping on what became a two-month odyssey that topped out at 272 on that climatic earnings day. Love Apple or not, the iPad and iPhone G4 are ruling the geek universe and the normal world simultaneously.

Next week is a liftoff to 300 or it pulls back to 255, maybe 250. How many stocks keep revving higher in a flat market, seven sessions in a row? I can think of one.

GS (137.82 +0.63%) and C (4.01 +1.26%) didn't move as much as their Euro counterparts. I still don't like finnies long term. Too many damned questions.

FXE was basically flat (123.36 -0.11%) while STD (11.53 +2.31%) lost roughly half of its early gain. Those boys at Banco Santander have balls of steel, calling out the Eurozone (Germany, in particular) by demanding stress tests, then grading out No. 1 in leaked reports. Then STD turns out to be a bullish buyer on both sides of the Atlantic. If Santander were a sports team, I'd be a fan. They take care of their shit.

IRE moved up big, 3.86% to 4.30. NBG lost 1.63% to 2.41, but I have no desire to touch any Greek stocks. Ever.

FCX was flat (65.90 +0.14%) and FXI was equally quiet (40.66 +0.10%). US Steel (X) lost 1.56% to 43.41, ending a very turbulent week with ups and downs. SLV moved up again (18.75 +2.29%).

GLD up again (122.83 +0.76%) and gets a lot of headlines for all-time highs in the metal, but really ... so what? Sure, it gains quite a bit from a 2- or 3-year perspective, or a 5- or 10-year perspective. It's a hedge against inflation, against dwindling currencies ... and unless you hoard bars of the pretty yellow metal, your paper ownership can be "confiscated" by Uncle Sam in times of dire need.

I like gold/GLD as a small piece of the portfolio, nothing more.

TLT also flat today (97.69 -0.16%).

USO up 0.77% to 35.41. BP had another "boring" day with a 0.16% gain to 31.76. All BP shareholders are hoping for plenty of these quiet days.

My Nat Gas 40, a collection of the first 40 sector plays I found on the day of Obama's clean energy speech (15 days ago), was up 0.02% today. As a whole, the 40 are up 12.19%, staying flat the past few days.

Bronco Drilling (BRNC) had a massive gain of 9.84% to 4.24 today and is now up 21.8% since Obama's talk. PQ (+4%), PETD (+3.15%), NGS (+2.57%), GDP (+2.48%) also had nice moves today. In all, 18 of the 40 were in the green today.

My favorite natty gassers, WPRT (18.62 -2%) and CLNE (17.15 -0.81%) were down. UNG sold off 2.29% to 8.53. It remains a buy below 8.00 and a sell above 8.75. It's one of those notorious plays that traders love and investors hated and still hate due to its incredible lack of strength. At this level, though, it's playing fair. It just trades so freaky compared to the sector so often. It'll gain massively while the entire sector is in the red that day. Then it'll tank as high fliers with tiny floats move up, up, up.

Overall, however, this is probably as stable as the industry has been in the market for some time. All because of BP, and all because of Obama, who reiterated his stance on clean energy earlier in the week. That staved off what would've been inevitable mass selling after several natty gassers hit 20%-plus gains in less than two weeks.

Eventually, though, the sector needs another catalyst. Obama can stoke the fire only so many times. The industry needs some real roots into America's energy grid. Question is when.

Happy Father's Day weekend, everybody. Aloha!

Options madness is over ... is this market finally topping out?

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